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Bearish OB

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92 views4 pages

Bearish OB

Uploaded by

fahadfx.trading
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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ICT Bearish Order Block

What is ICT Bearish Order Block?

ICT bearish order block is the zone/area in a price chart, where a large number of sell orders
are placed by smart money in the market and market shows sudden strong move from that
area.

Retail traders follow smart money foot prints, so they wait for these order block zones to sell
in the market & make profit along with big institutions like banks.

Bearish order block is a bullish candle followed by a strong bearish engulfing candle.

How to Identify Bearish Order Block?

A bearish order block is the last bullish candle before the bearish impulse move, it typically
consist of two candles, with the first candlestick being a bullish and the second candlestick
being a bearish one.

But to identify a valid bearish order block you need to check following things.

(I) Second candle being a bearish candle, should grab the high of previous bullish candle.
Price should go above the high of previous bearish candle.
(II) Second candle being a bearish candle should close below the low of previous bullish
candle.

(III) Imbalance in lower timeframe in the order block zone.

(IV) Structure shift in lower timeframe.

To sum it up we can say second candle should completely engulf the first candle – body to
body & wick to wick.

How to Trade Bearish Order Block?

To initiate a trade based on a bearish order block, it’s essential to first identify the prevailing
market order flow or trend.

Bearish order blocks typically hold greater reliability within a bearish trend. However, during
a bullish trend, they might offer only a brief retracement.

Thus, it’s advisable to execute trades on bearish order blocks within a bearish market
structure.

Once the market trend is determined, the next step is to identify a valid bearish order block,
as outlined previously.

Upon identifying a bearish order block, it’s important to wait for the price to retest it.

When the price approaches the bearish order block, consider executing a sell trade at around
the 50% retracement level of the bearish order block.

For additional confirmation, you may seek out signals such as the ICT Market Structure Shift,
especially on lower time frames like 15 minutes or 5 minutes.
In the picture above you can see EUR/USD daily timeframe chart.

In this picture market has shifted its structure to sell side indicating bearish momentum.

After market structure shift and creating a bearish order block at top, price came back to
retest the bearish order block.

When price approached the bearish order block a sell trade was executed after confirmation
in lower time frame.

And you can see the results, it delivered 1:4 risk to reward.

Stop Loss and Take Profit

When executing a trade based on a bearish order block, consider placing your stop loss
approximately 10 to 20 pips above the low of the order block.

As for setting a take profit, you can aim for the next significant liquidity draw.

Is ICT Bearish Order Block Reliable?

Yes a bearish order block is reliable for trading mostly in bearish trend as it may offer
continuation of bearish trend.

While in bullish trend the bearish order block may act as liquidity and price may go higher
breaking the bearish order block.

Can We Trade using Bearish Order Block Alone?


Yes you can trade solely on the basis of bearish order block using the correct bearish order
block in ICT Optimal Trade Entry zone, in bearish trend and using ICT Market Structure Shift in
order block zone as confirmation of trade.

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