01/02/2025
Type of entries
1) Fair value gap:
An FVG is an area on the price chart where a gap or imbalance occurs between candlesticks. This typically happens when a price moves too quickly in one direction, leaving a gap in price where few or no trades occurred.
Trade Setup: Traders look for price to revisit this gap area, which often acts as a magnet for price to fill in the imbalance. This is seen as an opportunity to enter a trade when price retraces to this level.
Example: If the market makes a strong move upward, but there’s an area between two candlesticks where there was little to no price action, that area is an FVG. Price might retrace to fill that gap before continuing in its original direction.
2) Order block
An order block is a price zone where significant buying or selling activity occurred, often associated with institutional trading. It is typically identified as a consolidation or accumulation phase before a strong price move in one direction.
Trade Setup: When price revisits this order block, it is expected to react as support or resistance, because these blocks represent areas where large orders were placed.
Example: If a strong bullish move occurs after a consolidation phase, the consolidation area is an order block. If the price comes back down to this area, it might act as support, creating an opportunity for a long trade.
3) Breaker block
A breaker block is a previous support or resistance level that has been broken. After the price breaks through, the old support or resistance often becomes the opposite, i.e., resistance turns into support or vice versa.
Trade Setup: Traders look for price to return to the breaker block zone after the breakout. Once it re-tests the area, they anticipate the new support or resistance to hold, creating a potential entry point.
Example: If the price breaks a support level and moves lower, then revisits the broken support level, this level is now a “breaker block.” If price reacts to it as resistance on the retest, this could be a good opportunity for a short entry.