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Order Block Theory - Institutional Trading Method

  • #21
  • Feb 22, 2021 12:08am Feb 22, 2021 12:08am
To bad no one ever taugh us over at babypips that "Suppy and Demand" trading, Aka, order flow is nothing more than a fallacy. That we can tell because this market is decenteralized which allows many shady things to occur.

Supply and demand trading can not be possible in forex when the broker has the ability of "b-booking" your orders. B-booking your order alone means that the broker can redirect your order against its balance sheet ot have it go towards the market.

If it is against their balance sheet then your volume will never show in an order book or in an level 3 being as it never was reflected as being an actual order that hit the market.

The fact that many brokers have different quoted prices when we are presuming that the volume given is infact accurate makes supply and demand trading super impossible. Any system based on supply and demand will have to be created on the fundemental that all the volume and all the data is correct, and we know with over 10 days of trading that level 2 and level 3 in forex doesn't exsist and the reasons why.
Threesome Daddy
  • #22
  • Feb 22, 2021 1:14am Feb 22, 2021 1:14am
Quoting NateBeruk
so order block is basically just a supply and demand rebranded yeah?
No, I wouldn't say that. Take some time and go through ICT's videos especially the 12 Months Mentorship series.
  • #23
  • Edited 1:53am Feb 22, 2021 1:28am | Edited 1:53am
Quoting SingaRich
To bad no one ever taugh us over at babypips that "Suppy and Demand" trading, Aka, order flow is nothing more than a fallacy. That we can tell because this market is decenteralized which allows many shady things to occur. Supply and demand trading can not be possible in forex when the broker has the ability of "b-booking" your orders. B-booking your order alone means that the broker can redirect your order against its balance sheet ot have it go towards the market. If it is against their balance sheet then your volume will never show in an order...
Supply and demand is based on the market where there are buyers and sellers and where an imbalance will cause the price to move up or down. Orderblocks are not based on that. It is based on the theory that the banks are making a use of an algo that has to deliver price efficiently in their management of liquidity (as the liquidity providers). An Orderblock is one of the reference points it uses in that process. In its price delivery an algo can violate a Supply and Demand imbalance if it sees an area where it can buy at a discount or sell at a premium (turtle soup, stop runs or some may call it a stop hunt) and hence you can find an Orderblock failing at times. That is one of the negatives I observed about SnD. With Orderblocks you have to keep other reference points (Fair Value Gaps, Liquidity Voids, Liquidity Pools, Stop Runs and Equilibrium) in mind. You have to look at what the algo is doing and remember that the banks are buyers and sellers.
  • #24
  • Feb 22, 2021 1:54am Feb 22, 2021 1:54am
It would be nice if people typed less and posted more charts.
"Cut your loses short and let the winners Run"
  • #25
  • Feb 22, 2021 3:26am Feb 22, 2021 3:26am
Quoting Pumi
{quote} Supply and demand is based on the market where there are buyers and sellers and where an imbalance will cause the price to move up or down. Orderblocks are not based on that. It is based on the theory that the banks are making a use of an algo that has to deliver price efficiently in their management of liquidity (as the liquidity providers). An Orderblock is one of the reference points it uses in that process. In its price delivery an algo can violate a Supply and Demand imbalance if it sees an area where it can buy at a discount...
Now, how is it that they are to provide "Liquidity" to a market which doesn't represent its true supply and demand ? Stop runs, Equililbrum, Liquidity pool are all terms created to " validate" a theory which will remain a theory because it doesn't have any set parameters or even rules for deviations.

Stop hunts or Stop runs are by far the biggest fallacy because of the fact that the brokers strongly control their ASK price. If stop runs were actually real, the brokers would simply run your stops by manipulating the Ask causing to stop out byway of the spread alone.

Perhaps I am pessimistic because I like may of you have taken my fair share of lumps, but in a world where we can "Show and Prove" by the use of third party software suchs as TE, or myfxbook then why hasn't atleast 5 people opened a thread, funded am accout with 50 dollars and show the world how effective this system is?
Threesome Daddy
  • #26
  • Feb 22, 2021 3:31am Feb 22, 2021 3:31am
Quoting meck1
It would be nice if people typed less and posted more charts.
Much essier to copy and paste what was "taught" instead of standing infront of the class and showing what you have learned. I would try to learn this system and throw some cash at it, but I won't risk my BBL on a "system" which no one has tested on a live account or even shared the results to show it would work.

If you truly have an edge then set 10 recommendations and win 9 out of them. Anything else is just fluff no?
Threesome Daddy
  • #27
  • Feb 22, 2021 3:43am Feb 22, 2021 3:43am
Quoting SingaRich
{quote} Much essier to copy and paste what was "taught" instead of standing infront of the class and showing what you have learned. I would try to learn this system and throw some cash at it, but I won't risk my BBL on a "system" which no one has tested on a live account or even shared the results to show it would work. If you truly have an edge then set 10 recommendations and win 9 out of them. Anything else is just fluff no?
Just read through the whole thread I didn't see anyone tell you to put money on this system the Author just posted information he thought was useful and shared it here to give it a try. I don't understand the problem here was expecting people to start posting charts of today's market along with the information he shared and discussing on the topic.
"Cut your loses short and let the winners Run"
  • #28
  • Feb 22, 2021 3:47am Feb 22, 2021 3:47am
Quoting meck1
{quote} Just read through the whole thread I didn't see anyone tell you to put money on this system the Author just posted information he thought was useful and shared it here to give it a try. I don't understand the problem here was expecting people to start posting charts of today's market along with the information he shared and discussing on the topic.
You are correct that "No one told me to put money into it" however, leading by example is how one proves or disapproces something. A ton of words, no charts, leads me to believe that maybe it doesn't work. I wil sit back and hope someone loads a TE but I won't hold my breath because I see many are just "watchers" or "bloggers" and not actual traders.
Threesome Daddy
  • #29
  • Feb 22, 2021 6:34am Feb 22, 2021 6:34am
Before and After
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  • #30
  • Feb 22, 2021 9:41am Feb 22, 2021 9:41am
Quoting orderblock
Before and After{image}{image}
Hi Mate

can you guide me why price not fill this gap first.
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"Exchange of hands"
  • #31
  • Feb 22, 2021 11:09am Feb 22, 2021 11:09am
Quoting bilal1947
{quote} Hi Mate can you guide me why price not fill this gap first. {image}
The best OB are the ones which break market structure
"Cut your loses short and let the winners Run"
  • #32
  • Feb 22, 2021 11:25am Feb 22, 2021 11:25am
just to show you how effective OB are despite time frame, here i set 2 buy limits on the inefficiancy to get a quick scalp it missed my entry 0.1pips at 1st
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zooming in to see why i placed the limits there, on the 1st limit i went to m1 i was targeting this OB which was missed by a fraction
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the 2nd limit i was targeting the OB on m5 as the second entry
Attached Image


price then consolidated for a bit and i drew the yellow line prior to show liquidity was being built and was anticipating a liquidity grab which would also hit entries and thats exactly what happened reversing exactly at the m5 OB i had highlighted for a quick 20pip scalp.
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"Cut your loses short and let the winners Run"
  • #33
  • Feb 22, 2021 2:48pm Feb 22, 2021 2:48pm
Quoting meck1
{quote} The best OB are the ones which break market structure
the one i mark has also did a bos too confused!
"Exchange of hands"
  • #34
  • Feb 22, 2021 2:55pm Feb 22, 2021 2:55pm
Quoting bilal1947
{quote} the one i mark has also did a bos too confused!
If you are not sure you can always split the initial lotsize by half and put pending orders on both OBs just incase it goes to the one on top.
"Cut your loses short and let the winners Run"
  • #35
  • Feb 22, 2021 3:02pm Feb 22, 2021 3:02pm
Quoting meck1
{quote} If you are not sure you can always split the initial lotsize by half and put pending orders on both OBs just incase it goes to the one on top.
Thanks mate, lets see how the OP has seen that may be he has specific reason for the OB too
"Exchange of hands"
  • #36
  • Feb 22, 2021 3:26pm Feb 22, 2021 3:26pm
This is other good example...
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  • #37
  • Feb 22, 2021 3:31pm Feb 22, 2021 3:31pm
Quoting orderblock
This is other good example... {image}{image}
yes i get that but was curious about the earlipost only, keep sharing mate
thanks
"Exchange of hands"
  • #38
  • Feb 23, 2021 6:32am Feb 23, 2021 6:32am
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  • #39
  • Feb 23, 2021 2:46pm Feb 23, 2021 2:46pm
Quoting meck1
... price then consolidated for a bit and i drew the yellow line prior to show liquidity was being built and was anticipating a liquidity grab which would also hit entries and thats exactly what happened reversing exactly at the m5 OB i had highlighted for a quick 20pip scalp. {image}
Hi meck1,
what do you mean by "liquidity being built" and "liquidity grab"? I see what you mean (to some extent) on the chart but what is the process behind it? I see this pattern quite often but never really got what it means behind the bars
  • #40
  • Feb 23, 2021 2:59pm Feb 23, 2021 2:59pm
Quoting ForeverNewb
{quote} Hi meck1, what do you mean by "liquidity being built" and "liquidity grab"? I see what you mean (to some extent) on the chart but what is the process behind it? I see this pattern quite often but never really got what it means behind the bars
When you see support/resistance levels being created like the yellow line I drew, usually they would be stops placed right below them (liquidity) by other traders, so more often than not a stop hunt occurs to trigger them (liquidity grab) and price continues on. It's nice to be aware of such levels and reactions which happen around them so that you don't fall for the false breakouts.
"Cut your loses short and let the winners Run"
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