Order Block Finder V2
A new version of the most popular TradingView Indicator for Order Blocks is available
Important Update:
The TradingView Scrip Moderation team has decided that the V2 changes to the original OBF Indicator are not significant enough to justify the publication of a new, paid-only script. The Indicator has therefore been blocked and cannot be accessed anymore on TradingView.
I am now evaluating my options and will provide an update as soon as I have decided on how to move forward.
Before we concentrate on the new V2 version, lets first look back at the ORIGINAL...
Order Block Finder (Experimental)
Revisiting one of the most popular Order Block indicators
With over 18.000 boosts and almost 400 comments, the "Order Block Finder (Experimental)" by Wugamlo is one of the most popular open-source TradingView Indicators dealing with the topic of Order Blocks.
The goal of the indicator is to identify Order Blocks where big players executed big orders. These prices levels are "Areas of Interest" and we expect with a certain probability that price will return to these levels in the future. The trader is then able to position himself accordingly in advance.
Understanding Order Blocks and the Concept behind
Order Blocks are areas of concentrated trading activity, typically characterized by a large number of buy or sell orders being executed in a relatively short period. This concentrated activity can be driven by institutional traders who are trying to buy or sell a significant amount of an asset.
Why Do Order Blocks Form?
Order Blocks can form for a variety of reasons, including:
Imbalance of supply and demand, leading to rapid price movements
Triggering of stop-loss and take-profit orders, resulting in a surge in trading activity
Market sentiment and psychology, creating a self-reinforcing cycle of traders entering the market
Why Do Prices Tend to Return to Order Blocks?
There are several reasons why prices tend to return to Order Blocks:
Unfilled orders remaining in the market, acting as a magnet for prices to return
Institutional memory, where traders use previous Order Blocks as reference points for future decisions
Market structure, including support and resistance levels, trend lines, and chart patterns
How the Order Block Finder Indicator Works
The original "Order Block Finder (Experimental)" is a powerful tool designed to help traders identify these institutional Order Blocks in the market. Developed by Wugamlo, this indicator has been widely used by traders to gain insights into market structure and potential trading opportunities. Due to its success and simplicity, it gathered a significant number of followers on TradingView.
The indicator uses a unique algorithm to detect specific candlestick patterns that indicate the presence of institutional Order Blocks. These blocks often signal the beginning of a strong move, and there is a high probability that these prices will be revisited at a later point in time again, making them interesting levels to place limit orders.
The Order Block Finder indicator can be used in a variety of ways, including:
Identify potential trading opportunities by detecting institutional Order Blocks and placing limit orders near the "Areas of Interest"
Manage risk by identifying areas of support and resistance, and providing insights into market sentiment and psychology
Gain insights into market structure by identifying patterns and trends in the market
Additional information
This indicator was also covered in various YouTube videos - here some examples:
The old version "Order Block Indicator (Experimental)" can be found here.
It is free and open-source.
