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1. Order blocks indicate a strong potential concentration of orders placed from Institutional and high-volume traders
2. Due to the sheer volume of orders, order blocks can also be treated as potential support and resistance zones.
3. Order block zones should be considered important points of interest (POI)) as prices can potentially make some big moves in either direction depending on past market structure.
4. If prices bounce off order block zones, they can be considered strong support and resistance zones.
5. However, if the price is showing multiple rejections from order block zones, then this could indicate a potential weakening of support and resistance in these areas.
6. I did an order block scalping strategy backtest on a 1-minute chart.
In a single trading day, I placed buy and sell orders that bounced off an order block and the results were quite impressive!
I found 23 setups, from multiple forex pairs and grew a hypothetical $100 forex account to 35.76%! In one day, trading a 0.01 lot position.
Now this backtest was just to get an indication of how effective order blocks can be and if I was to create a proper strategy around it then I would definitely add some more confluence o make a it strong strategy for success.