My Favorite Reversal Pattern | Orderblocks - ICT Concepts

How's it going everyone? This video is going to be over my favorite entry model or reversal model, and that is using order blocks.

So we will hop into a PDF, go over that before hopping into some examples on the charts. This is my favorite reversal pattern.

Now the first thing I start with is an important level, whether this is a PD array or buy side liquidity, it's resting above price here.

On a lower time frame, price reaches up and puts in a swing high. Price then reaches up and rates this high here.

My eyes go to this up close candle or series of up close candles here.

When price closes below this up close candle, it then validates this order block and I'm looking for it to support price lower.

Similarly down here, I have an important level resting below price. Price then creates a short-term low.

It then rates this low. My eyes go to where? This down-close candle here, or series of down-close candles.

When price closes over this down-close candle, I'm looking for it to support price higher.

So let's get into the charts and look at a few examples of this. So here we have DXY on the daily chart, and we're going to be watching this daily fair value gap as our point of interest.

So if we zoom in here, you can see we have a fair value gap resting above us here. So let's see if we put in a swing low here.

We do put in a swing low. So now we have liquidity resting right above our point of interest.

Let's see what happens. We fill this fair value gap. We get a move down.

Don't quite take these lows yet. The next day, we sweep these lows into the point of interest.

So what are my eyes looking at? this down close candle into the point of interest that swept these lows.

So I want to see when price closes over this high.

So price closes over this high.

Now I'm going to be looking at the opening price of this order block. So let's see what happens.

Now we have a fair value gap here as well.

Price reaches into this order block. It's important to notice the close is outside the opening price of the order block.

And the following or next day, we get a move higher, reaching for this high here.

So you can see how the down close candle on the move that swept these lows here into the point of interest was used to support price higher.

We are going to be looking at U.S. oil on the daily chart.

Now, if you notice, we have previous months high resting here, and we have a weekly fair value gap resting below us here.

We just put in a swing high here and a swing low here. So let's see what happens.

We get a nice full-bodied up-close candle into this point of interest.

So if we close below it, I would like to see it become an order block.

There we get a close below it. So I'd want to see the opening price of this support price lower.

So we get a move up to retest this area and this placement lower. Let's see what happens next.

we sweep this sell side liquidity here and create a fair value gap.

So let's see what happens here if we reach for this weekly fair value gap.

So we do reach for the weekly fair value gap as this daily fair value gap supports prices lower. Now what do we notice?

We have a point of interest. We swept this low.

So if we get a close over this high, I'd like to see this candle become an order block.

So we do get a close over this. So marking out the opening price.

I want to see this support price higher.

Now we have overlapping PD arrays as we have a fair value gap and an order block lined up.

Price reaches into this order block, gets displacement out. So now my eyes are drawn to where?

These areas of buy side liquidity.

And there we go. Oil makes a move higher to these previous highs.

So you can see how these full-bodied up-closed candles here when they get closed below, support price lower.

And these down-closed candles when they get closed above, support price is higher. Let's go to our next example.

For this next example, we are going to be looking at NQ on the five-minute chart.

To start out, we have our daily level or important level here, which is sell-side liquidity from the daily chart here.

So let's drop into the five minute chart. So here we are on the five minute chart and we just hit that daily swing low.

So what I want to see is do we get displacement back up here?

Now, what I don't really like is I prefer a nice full bodied candle down into this low. But let's see what happens.