Trade Continuations Using Order Blocks

How's it going everyone? This video is going to be over using order blocks for continuations.

Now if you've seen my reversal sequence video, you know how I look at reversals,

and many think that if they miss the reversal entry, they are left behind, and that is simply not true.

That just means the reversal is confirmed, and then I can look for continuation entries. So how do I do that?

So the first thing we got to look for is the reversal. So here you can see the reversal sequence has formed with the purge.

We have the change in the state of delivery. So we have an invalidation at this low.

Now if I miss this first entry here off the order block or I want to wait for more confirmation, I just need to let some structure form and essentially waiting for that higher low to form.

Now you can see here with a fair value gap,

price trades back lower into a point of interest, and then when we get the close through, the down close or series of down close candles into that point of interest, we have a new invalidation.

Using that invalidation, I can then position myself with my stop on this low instead of the reversal low, allowing me for better risk to reward to catch this expansion move.

Now there are two types of entries I look for when seeking a continuation entry,

and that is a reaction out of a fair value gap or a sweep of a low.

So you can see here as shown in the first example

when price retraces into a fair value gap that

will be used as the important level then when the series of down close candles is closed through I can then look to get on side with that with my stop at the low.

And then the next way I will look to frame entries in a continuation is when we sweep out a low and then close through the series of down close candles

that swept out that low, looking to get on side with the continuation following.

Now the only time price does not need to sweep out a low or reach into a fair value gap is if we are using correlated assets and have an SMT with that.

So you can see here with two correlated assets, one sweeps out the low while the other doesn't.

I can then still consider this an opposing candle or an order block because it is paired with SMT.

So let's hop into trading view for some examples.

So here we are in our first example and you can see on the daily chart we have had multiple days of expansion and then we have a nice large wick here.

If you've seen my wick video you can see we can use this to frame a reversal if price respects the lower half of this to trade lower.

You can see we fall just shy of that previous day low, creating equal lows.

So with this, we have an hourly change in the state of delivery here.

And going into the next day, we come into the New York session and we sweep out this high, which is also paired with SMT.

So all things combined, we have a bias to look lower, and we have just swept out a high, still respecting the wick of this higher time frame candle.

Now if you've seen my daily bias video, you can see with closing back inside the range here on the hourly candle, I can look to trade this lower from here.

So going to the five minute. So

down here on the five minute, I have also added my indicator so

you can visualize the hourly candles and you can see our draw on liquidity, which is that previous day low marked out there, which also lines up with our standard deviation projections.

So you can see we have now had that change in the state of delivery, so I can look to get onside with this move here.

Now, as it starts to trade lower here, I might think that I've missed the move, when in reality, that is not the case.

All I have to do is wait for a new order block to form, right?

So instead of trying to chase this, I'm just going to wait for a point of interest,

which is either going to be a high or a fair value gap.

If you notice, we don't have any highs in here in the area I'm looking to see respected.

So marking out these fair value gaps here, there's one, there's one, and even one above.

How do I know which one to look for? And the reality is I don't need to know which one forms the high because I'm not looking to trade the high.

I'm going to let the high form and then trade the continuation off of it or the order block formation.

So let's see if we get a continuation. You can see it does reach up all the way into that last one.

I'm not interested in trying to take a position and tell what occurs.

We get a closure through the series of up close candles into an important level.

So to clean things up, I can remove those fair value gaps, as we did tag this one, and wait for a closure through.

We have yet to get the closure through, so I'm just waiting.