Order Block Retests with Trend, Momentum, and ATR Risk Controls
Summary
This strategy approximates bullish and bearish order blocks from the most recent opposite-color candle associated with a market-structure break. A break occurs when the close exceeds the prior lookback high or falls below the prior lookback low. The latest break determines which directional zone is active, and price must retest that zone before an entry can qualify.
Long entries require price to close above the bullish zone midpoint, fast EMA above slow EMA, RSI above 50, and stochastic K above D while below 80. Shorts use the inverse trend and RSI conditions, with stochastic K below D and above 20. Stops are placed beyond the zone boundary with an ATR buffer, and targets use a configurable risk-reward multiple; positions are limited to one at a time. The source describes the rules but supplies no backtest results or market context. The order-block construction is an approximation, and the excerpt ends partway through the plotting section, so some script details are unavailable.
Key ideas
- A structure break is defined by a close beyond the high or low of a prior lookback window.
- The most recent bullish or bearish break determines the active approximated order-block zone.
- Entries require a retest of the zone plus EMA, RSI, and stochastic confirmation.
- Stops extend beyond the zone using an ATR buffer, while targets are set from a risk-reward multiple.
- No performance evidence is provided, and the supplied source is truncated during its plotting section.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.