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3 strategies and tactics for Order Blocks

What is Order Blocks strategy?

Every great achievement starts with a well-thought-out plan. It can be the launch of a new product, expanding into new markets, or just trying to increase efficiency. You'll need a delicate combination of strategies and tactics to ensure that the journey is smooth and effective.

Finding the right Order Blocks strategy can be daunting, especially when you're busy working on your day-to-day tasks. This is why we've curated a list of examples for your inspiration.

Copy these examples into your preferred tool, or utilize Tability to ensure you remain accountable.

How to write your own Order Blocks strategy with AI

While we have some examples available, it's likely that you'll have specific scenarios that aren't covered here. You can use our free AI generator below or our more complete goal-setting system to generate your own strategies.

Order Blocks strategy examples

You will find in the next section many different Order Blocks tactics. We've included action items in our templates to make it as actionable as possible.

Strategies and tactics for implementing Smart Money Concepts in Trading

  • ⛳️ Strategy 1: Utilise Market Structures and Order Blocks

    • Analyse internal market structure to identify potential reversal points
    • Monitor Bullish and Bearish Order Blocks to anticipate market turns
    • Focus on mitigation methods like High/Low for precise trade entries
    • Set alerts for BOS and CHoCH to capture market structure shifts
    • Incorporate historical analysis of swing structure to enhance predictions
    • Use ATR as a volatility filter to detect significant order blocks
    • Implement confluence filters to prioritize significant structure breakouts
    • Utilise colour-coded candle analysis to assess current trends visually
    • Apply sensitivity thresholds to detect pertinent equal highs and lows
    • Conduct regular audits of past trades to refine order block strategies

  • ⛳️ Strategy 2: Implement Fair Value Gap Strategy

    • Identify Fair Value Gaps using defined thresholds and timeframes
    • Utilise visual indicators like rectangles to mark these gaps on charts
    • Set automated alerts for the formation of bullish and bearish gaps
    • Apply a timeframe change filter to detect gaps with significant price shifts
    • Use real-time analysis of Fair Value Gaps to inform immediate trading decisions
    • Extend gap boxes to visualize long-term market trends
    • Incorporate cumulative mean range as an alternative volatility measure
    • Prioritize gaps in high-interest market periods for higher significance
    • Backtest Fair Value Gap strategies to evaluate past market performance
    • Integrate Fair Value Gaps into a broader strategic framework with additional indicators

  • ⛳️ Strategy 3: Leverage Multi-Timeframe and Zone Analysis

    • Utilise multi-timeframe analysis to find stronger market levels
    • Highlight daily, weekly, and monthly highs and lows on charts
    • Evaluate premium, discount, and equilibrium zones to identify entry and exit points
    • Draw zones with distinct labels and colour coding for quick identification
    • Avoid higher timeframe zones for more precise trading in lower timeframes
    • Identify equilibrium points by calculating average highs and lows
    • Track trailing extremities to maintain updated support and resistance levels
    • Deploy different line styles to differentiate between timeframe zones
    • Perform regular checks for confirmations from higher timeframes
    • Study correlation between trailing swings and price movements for strategic refinements
market-structureorder-blockstradermarket-analysttrading-teamanalysis-team
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Strategies and tactics for developing a Price Action Strategy for XAUUSD

  • ⛳️ Strategy 1: Identify and Trade Key Order Blocks

    • Analyse five-minute XAUUSD charts to identify potential order block zones
    • Mark the boundaries of these order blocks using horizontal lines
    • Wait for price action to retrace back to these order blocks
    • Confirm order block validity by monitoring if price respects these levels in the past
    • Initiate a buy trade if the price touches a bullish order block and shows signs of reversal
    • Initiate a sell trade if the price touches a bearish order block and shows resistance
    • Set a stop-loss order slightly beyond the order block boundary
    • Set a minimum risk-to-reward ratio of 1:2 for potential take profit levels
    • Backtest this strategy on historical data to ensure the sample size of over 50 trades
    • Review and optimise the strategy periodically to ensure a profit factor above 1.3 and drawdown below 50%

  • ⛳️ Strategy 2: Use Market Structure for Optimal Entry and Exit

    • Identify the current market structure and trend on the XAUUSD five-minute chart
    • Mark significant swing highs and lows to determine trend direction
    • Wait for order blocks to form at areas of confluence with identified market structure
    • Enter trades when there is a clear break or bounce from an order block within the trend
    • Use a trailing stop feature to lock in profits as the price moves in favour
    • Set initial stop-loss orders within the nearest structural highs or lows beyond order blocks
    • Aim for larger take-profit targets by considering overall market structure and potential reversals
    • Ensure the strategy generates a minimum of 50 trades by testing across different market conditions
    • Track performance metrics regularly to ensure they meet the desired profit factor and drawdown criteria
    • Continuously optimise the stop-loss and take-profit settings based on observed market behaviours

  • ⛳️ Strategy 3: Incorporate Technical Indicators for Additional Confirmation

    • Select a set of technical indicators such as RSI or Stochastic to confirm order block trades
    • Use these indicators to identify overbought or oversold conditions near order blocks
    • Only initiate trades when price action aligns with signals from at least one confirming indicator
    • Adjust indicator settings to work effectively on the five-minute timeframe on XAUUSD
    • Backtest the strategy using historical data to verify the effectiveness of additional indicators
    • Implement stop-loss and take-profit levels that align with indicator-based trade entries
    • Regularly evaluate the performance to ensure the strategy produces over 50 trades fitting criteria
    • Monitor the profit factor and drawdown post-trade execution to confirm achievement of objectives
    • Adapt indicator parameters in response to changing market dynamics without overfitting
    • Continuously assess the combination of price action and indicator signals for trade validation
price-actionorder-blockstraderanalysttrading-teamrisk-management-team
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Strategies and tactics for implementing a Price Action Strategy on ES Five-Minute

  • ⛳️ Strategy 1: Identify and mark order blocks

    • Review historical five-minute price charts to understand order block formations
    • Use candlestick patterns to identify potential order blocks
    • Mark significant bullish and bearish order blocks in real-time trading
    • Validate order blocks by observing price reactions post-formation
    • Segment and highlight order blocks using different colours for clarity
    • Identify high probability order blocks by analysing volume profiles
    • Track the distance between current price and the nearest order block
    • Use technical indicators to enhance order block identification
    • Review end-of-day charts to refine order block marking
    • Maintain a log of successful trades leveraged from identified order blocks

  • ⛳️ Strategy 2: Backtest and validate the strategy

    • Collect historical data on ES five-minute charts
    • Implement the order block strategy on backtesting software
    • Record results of each backtest, focusing on number of trades and profit factors
    • Analyse losing trades to identify shortcomings in strategy execution
    • Adjust strategy parameters based on backtesting results to improve performance
    • Compare performance against a baseline to ensure profit factor > 1.3
    • Run a drawdown analysis and adjust risk management rules accordingly
    • Backtest across different market conditions to ensure robustness
    • Use trade simulation tools to manage the execution speed accurately
    • Continuously update the backtesting process with new data

  • ⛳️ Strategy 3: Execute and monitor the live trading plan

    • Open a trading platform with direct access to real-time ES data
    • Implement trade entries and exits based on predefined order blocks
    • Use a trailing stop to mitigate large drawdowns
    • Set alerts on trading platform for order block activations
    • Monitor trading performances to ensure the strategy hits 50+ trades
    • Track profit factor regularly and adjust trade sizes if needed
    • Log daily trading results with detailed notes on each trade
    • Maintain a spreadsheet to compare live results with backtesting outcomes
    • Attune risk management to ensure drawdown remains below 50%
    • Regularly reassess the strategy's effectiveness compared to initial objectives
price-actionorder-blockstradermarket-analysttrading-teamrisk-management-team
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How to track your Order Blocks strategies and tactics

Having a plan is one thing, sticking to it is another.

Don't fall into the set-and-forget trap. It is important to adopt a weekly check-in process to keep your strategy agile – otherwise this is nothing more than a reporting exercise.

A tool like Tability can also help you by combining AI and goal-setting to keep you on track.

More strategies recently published

We have more templates to help you draft your team goals and OKRs.

Planning resources

OKRs are a great way to translate strategies into measurable goals. Here are a list of resources to help you adopt the OKR framework:

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