What is order Block?How to use order block

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4 Mar 2024

umutozcan057
3 Mar 2024

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Order Block is a concept used in technical analysis. There are two types of Order Blocks: Bullish Order Block and Bearish Order Block.

- **Bullish Order Block**:
It is observed when the downward trend ends. The last sell (red) candle that initiated the movement that caused the trend to change is the bullish order block candle. The region consisting of the highest and lowest levels of this candle is interpreted as the bullish order block region. After the market structure changes, the price usually touches the bullish order block area and continues its rise.
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- **Bearish Order Block**:
It is observed when the upward trend ends. The last buy (green) candle that initiated the movement that caused the trend to change is the bearish order block candle. The region consisting of the highest and lowest levels of this candle is interpreted as the bearish order block region. After the market structure changes, the price usually touches the bearish order block area and continues its downward movement.

Order Blocks are used to determine support and resistance levels and detect trend reversals. When prices reach an order block zone, investors may decide to buy or sell, thinking that prices may stop there and reverse. In cryptocurrency markets, order blocks refer to the collection of orders from whales and exchanges.
In which markets is Order Block used?

Order Block is a technical analysis strategy often used in financial markets. It is often used especially in the forex market. Additionally, the use of Order Block is common in cryptocurrency markets. Here, it refers to the collection of orders of big whales and exchanges. This strategy is based on identifying areas where price movements stop or reverse at certain levels. Therefore, markets where Order Block is used will generally be financial markets where liquidity and volatility are high. These markets may also include markets where other financial instruments such as stocks, commodities and indices are traded. As always, when using any technical analysis tool, it is important that it is used in conjunction with other market information and analysis methods.
What is the difference between Bullish and Bearish Order Block?

Bullish and Bearish Order Blocks are used to identify points where market trends reverse. The main difference between the two is determining which type of trend ends and in which direction a new trend begins.

- **Bullish Order Block**:
It is observed when a downward trend ends and an upward trend begins. The last sell (red) candle that initiated the movement that caused the trend to change is the bullish order block candle. The region consisting of the highest and lowest levels of this candle is interpreted as the bullish order block region.

- **Bearish Order Block**:
It is observed when an uptrend ends and a downtrend begins. The last buy (green) candle that initiated the movement that caused the trend to change is the bearish order block candle. The region consisting of the highest and lowest levels of this candle is interpreted as the bearish order block region.

In both cases, the price usually returns to the order block zone and continues to move in the direction of the new trend. Therefore, bullish and bearish order blocks are used to identify trend reversals and identify potential buying or selling opportunities.

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Cryptocurrencies

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