| name | order-blocks |
| description | Define and test ICT-style order-block candle zones. Use when labeling the last opposite candle before an objective displacement and structure break, without inferring hidden institutional orders. |
| license | Apache-2.0 |
| metadata | {"author":"ske-labs","version":"4.0"} |
Order Blocks Trading
A candle-zone heuristic conventionally defined before a displacement and structure break. OHLC data cannot establish that institutional orders remain there or caused a later reaction.
Identification
Bullish Order Block
- Find the last bearish candle before a strong upward move
- The move must break previous structure (higher high)
- Zone = open to low of that bearish candle
Bearish Order Block
- Find the last bullish candle before a strong downward move
- The move must break previous structure (lower low)
- Zone = open to high of that bullish candle
Validation
- Displacement: normalize return/range by ATR and elapsed bars
- Break of Structure: use an objective pivot and closed-bar buffer
- Retest count/age: record continuously and test first versus later returns
- Context state: define higher timeframe objectively and test its incremental value
Workflow
- Identify the zone with fixed timeframe, OHLC boundary, pivot, and displacement rules
- Get candle data around the zone:
get_candles_around_date(symbol=<symbol>, exchange=<exchange>, interval=<interval>, date=<date>)
- Mark the zone using
draw_chart_analysis with type demand (bullish) or supply (bearish)
- Wait for price to return to the order block zone
- Confirm entry with LTF structure shift, rejection wicks, or volume increase
- Stop loss below/above the order block
- Target next opposing order block or liquidity level
Evidence and Validation
- Treat the setup as a testable hypothesis, not a prediction. Define thresholds, entry, invalidation, and exit before evaluating outcomes.
- Calibrate on the same instrument, venue, session, and timeframe. Use closed candles and a held-out or walk-forward sample; record every variant tried.
- Include spread, fees, slippage, borrow or funding, partial fills, and latency. Reject the setup when net expectancy is not positive or depends on one narrow parameter.
- Return observed inputs, missing data, cost assumptions, entry, invalidation, exit, and a valid, watch, or no-trade status.
- Research basis: Treat an order block as a reproducible candle-zone heuristic, not proof of unfilled institutional orders. Order-flow research relates price impact to observable imbalance and market depth.
Key Rules
- Do not describe the zone as unfilled institutional inventory without order-level evidence.
- Test first and later retests with an expiry rule; keep failures in the sample.
- Define context and entry confirmation before evaluation and use closed bars.
- Quantify displacement in normalized units rather than a universal candle count.
Related Skills
- fair-value-gaps — test overlap between two explicitly defined candle-zone conventions
- market-structure-shift — BOS/CHoCH confirms the displacement that validates an OB
