Hello traders!
In this educational idea im going to be going over the 5 different main types of Order Zones on Crypto Charts & how i identify and draw these zones, aswell as what they are used for.
Orderzones are a way of marking on the chart historically significant areas where price had strong reactions to.
The price tends to come back to these areas and have strong reactions, the Order Zones act as a form of Support & Resistance.
For those who are new to Technical Analysis ; "Support" is a area on the chart price and demand (buying pressure) increases from, with "Resistance" being the opposite, with price decreasing and sell orders (Supply of asset) increasing from the latter.
Why do i use Order Zones?
-Reduces risk & increases probability of potential trades
-Trying to trade with; not against larger size traders such as institutions that use similar price levels due to historic signifcance
-Providing clear entry and exit points to calculate Risk:Reward Ratio (R:R)
-Providing reference points to capitalize on historical areas of market volatility
-Allows us to reduce clutter and find key areas as the volatility on Crypto makes it difficult to chart
We have 5 main types:
-Supply Clusters
-Demand Clusters
-Single Candle Supply
-Single Candle Demand
-Orderblocks
Supply Clusters & Demand Clusters
First we must find areas on the chart that look similar to a tightly squeezed together rectangle . Price should then make a "thrust" (major increase, or decrease in value) from this rectangular area. We use the Rectangle Tool to draw a zone across these areas.
In the below image you can click for a in depth explanation of how to use these clusters in your trades.
Single Candle Supply & Single Candle Demand
To draw and identify the Zones first we must find areas on the chart where a strong reversal occurs, at the start of the trend reversal, or at swing points we can find larger then normal "wicks": (wicks are the thin, needle points at the end of the candlesticks ) as you can see in the above and below images.)
Click the below image for a in depth explanation of how to use these zones in your trades.
Orderblocks
Orderblocks are the small square shaped candle bodies, usually found in between significant price moments. They are small "pauses" before the next move. We use the Rectangle Tool to draw a zone across these areas.
In the below image you can click for a in depth explanation of how to use Orderblocks in your trades.
If you take some time to go back over your charts (especially on the Monthly, Weekly & Daily timeframes) and test out some of these Order Zones, you will see more then often price comes back to these areas before reversing like a magnet towards the next closest Order Zone so they become a useful tool in any traders arsenal.
If you found the idea informative show your support by Liking & Commenting thank you!
In this educational idea im going to be going over the 5 different main types of Order Zones on Crypto Charts & how i identify and draw these zones, aswell as what they are used for.
Orderzones are a way of marking on the chart historically significant areas where price had strong reactions to.
The price tends to come back to these areas and have strong reactions, the Order Zones act as a form of Support & Resistance.
For those who are new to Technical Analysis ; "Support" is a area on the chart price and demand (buying pressure) increases from, with "Resistance" being the opposite, with price decreasing and sell orders (Supply of asset) increasing from the latter.
Why do i use Order Zones?
-Reduces risk & increases probability of potential trades
-Trying to trade with; not against larger size traders such as institutions that use similar price levels due to historic signifcance
-Providing clear entry and exit points to calculate Risk:Reward Ratio (R:R)
-Providing reference points to capitalize on historical areas of market volatility
-Allows us to reduce clutter and find key areas as the volatility on Crypto makes it difficult to chart
We have 5 main types:
-Supply Clusters
-Demand Clusters
-Single Candle Supply
-Single Candle Demand
-Orderblocks
Supply Clusters & Demand Clusters
First we must find areas on the chart that look similar to a tightly squeezed together rectangle . Price should then make a "thrust" (major increase, or decrease in value) from this rectangular area. We use the Rectangle Tool to draw a zone across these areas.
In the below image you can click for a in depth explanation of how to use these clusters in your trades.
Single Candle Supply & Single Candle Demand
To draw and identify the Zones first we must find areas on the chart where a strong reversal occurs, at the start of the trend reversal, or at swing points we can find larger then normal "wicks": (wicks are the thin, needle points at the end of the candlesticks ) as you can see in the above and below images.)
Click the below image for a in depth explanation of how to use these zones in your trades.
Orderblocks
Orderblocks are the small square shaped candle bodies, usually found in between significant price moments. They are small "pauses" before the next move. We use the Rectangle Tool to draw a zone across these areas.
In the below image you can click for a in depth explanation of how to use Orderblocks in your trades.
If you take some time to go back over your charts (especially on the Monthly, Weekly & Daily timeframes) and test out some of these Order Zones, you will see more then often price comes back to these areas before reversing like a magnet towards the next closest Order Zone so they become a useful tool in any traders arsenal.
If you found the idea informative show your support by Liking & Commenting thank you!
