Order Block Zones from Momentum Moves and Candle Patterns

Summary

This indicator marks potential supply and demand zones by first detecting a large percentage change in the opening price over several bars. When that rate of change crosses a sensitivity threshold, it searches a recent window for the nearest candle of the opposite direction: a bullish candle for a bearish zone, or a bearish candle for a bullish zone. The selected candle’s high and low define the zone. The indicator draws these areas as rectangles and removes a zone after a close crosses its far boundary. Sensitivity can be adjusted to change how many zones are detected.

The author presents the zones as places where unfilled orders may remain, potentially acting as support, resistance, or a price attraction, and explicitly describes the tool as a context aid rather than a signal generator. An ES futures chart on a four-hour timeframe is cited as an example, but no performance test or evidence that the zones predict price movement is supplied. Results depend on the chosen threshold, asset, timeframe, and the trader’s separate decision rules.

Key ideas

• A rate-of-change threshold triggers a search for a recent candle to define a potential order block.
• The opposite-direction candle’s high and low form the bearish or bullish zone boundaries.
• A zone is removed when price closes beyond its far boundary.
• Sensitivity changes the number of zones, so settings may need to vary by asset and timeframe.
• The indicator identifies possible areas of interest but does not provide entry signals or validation of predictive value.

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