Finding Order Blocks from Consecutive Directional Candles
Summary
This indicator marks a potential bullish order block at the last down candle before a run of up candles, and a bearish block at the last up candle before a run of down candles. The default setting requires seven subsequent candles in the same direction. A configurable minimum move threshold can further qualify a candidate. The indicator plots the candidate candle's high and low as a zone and marks its midpoint, allowing traders to watch for later revisits.
The document describes order block levels as possible areas of interest for limit orders, but cautions through its alert text that detection is not itself a buy or sell signal. It includes a BTC/USDT futures backtest configuration, yet supplies no performance analysis. The page mentions support for displaying recent blocks and an intended multi-timeframe version, while the included code uses the chart timeframe. Candle-sequence definitions are mechanical heuristics; the material gives no evidence that these zones predict reversals or strong moves reliably.
Key ideas
- A bullish block is defined as a down candle followed by the required run of up candles.
- A bearish block is defined as an up candle followed by the required run of down candles.
- A minimum price move can filter candidate blocks, and plotted zones show the candidate candle's range.
- Block detection identifies levels to monitor, not standalone entry signals.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.