Order Block Retests with Trend and Momentum Confirmation

Summary

This strategy approximates bullish and bearish order blocks from the last opposite-color candle associated with a break of recent market structure. A bullish break is a close above the prior lookback high; a bearish break is a close below the prior lookback low. The script treats the latest break direction as active, then waits for price to retest that block and close on the appropriate side of its midpoint.

Entries also require trend and momentum agreement: fast and slow EMAs, RSI relative to its midpoint, and a smoothed stochastic comparison with overbought or oversold bounds. Stops sit beyond the block with an ATR-based buffer, and profit targets are calculated from the stop distance using a configurable risk-reward multiple. The document explains the intended logic but provides no backtest results or evidence that these approximate zones identify institutional activity. Its performance and robustness across instruments and market conditions remain unestablished.

Key ideas

• A close beyond the recent structure high or low defines a bullish or bearish break.
• The script approximates an order block using the most recent candle of the opposite direction before the break.
• Entries wait for a block retest and require EMA, RSI, and stochastic confirmation.
• Stops are placed beyond the block with an ATR buffer, and targets scale with the calculated risk.
• The document provides a rule description but no results validating the order block approximation or strategy performance.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.