OrderBlocks Indicator [SignalCave]
In technical analysis, the order block indicator is used to find the supply and demand zones that represent the support and resistance.
Supply and demand zones are a popular analysis technique used in day trading. The zones are the periods of sideways price action that come before explosive price moves.
A supply zone forms before a downtrend.
A demand zone forms before an uptrend.
Source: Flowbank
Demand Zone
A demand zone is the price area at which the traders usually buy. This area is present below the current price, where the highest buying interest or potential. This means the demand zone has many buyers available due to many buying orders at that level. When the price hits this level, the unfilled orders get completed and bring up the price.
Supply Zone
A supply zone is the price area at which the traders usually sell. This area is present above the current price, where the highest selling interest or potential. When the price hits this level, the unfilled orders get completed and bring down the price.
Source: Tradersunion
OrderBlocks [SignalCave] Indicator
OrderBlocks indicator have four main visual output which are active demand zones (green), active supply zones (red), tested zones (yellow) and inactive zones (black).
Active Zones: Once the market structure breakout or breakdown, indicator draws a new zone (green or red). When the price enters in the active zone at the first time, price tends to bounce over it.
Tested Zones: If price touches the active zone but did not close any bar over or below it, indicator marks the tested zone as a yellow color. If the price touches multiple times, zone get weaker and tend to break when the price enters same zone once again.
Inactive Zones: If bar close over or below any active zone then indicator marks it as a black color and it turns an inactive zone afterwards. Inactive zones have less effective price turning points compare to active and tested zones.
Indicator Works on Every Time Frame, Asset Class and Chart Type
Adjustable Scan Date
See OrderBlocks Indicator in Action
OrderBlocks [SignalCave] is an “invite-only” script that available on TradingView charting platform. Contact me for an access request.
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