Dynamic Order Blocks [LuxAlgo]

26 Mar

The Dynamic Order Blocks indicator displays the most recent unmitigated bullish and bearish order blocks on the chart, providing dynamic support/resistance areas.

When price sweeps an order block, this is highlighted by the script indicating a potential reversal.

The average between the displayed order blocks is also displayed.

🔶 USAGE



Order blocks are a popular method of price action analysis, representing price areas where more significant market participants accumulate their orders.



Displaying order blocks dynamically allows obtaining relevant areas of support/resistance. Users can obtain longer-term order blocks using a higher "Swing Lookback" setting.



Users can also use mitigation events to assess the current trend direction, with price mitigating a bearish order block (breaking above the upper extremity) indicating an uptrend, and price mitigating a bullish order block (breaking below the lower extremity) indicating a downtrend.

🔹Average Level

An average level obtained from the displayed bullish and bearish order blocks is included in the indicator and offers an additional polyvalent dynamic support/resistance level.

The change of direction of the average line can also be indicative of the current trend direction.

🔹Dynamic Sweeps



Price sweeping the mitigation level of an order block is highlighted on the chart using bordered rectangles. These highlight a breakout failure and can be indicative of a potential reversal.

🔶 SETTINGS

• Swing Lookback: Period of the swing detection used to construct order blocks. Higher values will return longer-term order blocks.
  
• Use Candle Body: Use the candle body as the order block area instead of the candle full range.