Order Blocks and Kill Zones

Order Block Definition

(0:07)
"it's a change in the state of delivery"

(0:08)
"the algorithm changes its state of delivery"

Change in State of Delivery

Trigger Point

(0:10)
"as soon as we get below this candle's open the market starts delivering cell side"

(0:15)
"and then it breaks this swing low so now we have changed gears internally"

Suspect Rally

(0:19)
"any rally after that is just setting up another run to go lower"

(0:25)
"so words this is a suspect rally okay"

Intermediate Term Swing High

(0:28)
"so this is an intermediate term High swing High because it has the imbalance it should not trade higher than that high"

Stop Loss Placement

(0:33)
"that's the reason why I'm telling you you can put your stop loss there"

Entry Setup and Execution

Setup Opportunity

(0:37)
"this setup here gives us a nice opportunity to get short so you could be a seller here on a limit entry"

Limit Order Placement

(0:41)
"so you place your limit order here and you just walk away from it you let it go"

Kill Zones - True Purpose

(1:11)
"it's important to know why the kill zones are there"

(1:13)
"kill zones are when you determine your entry and you place your orders and you walk away"

Critical Distinction

(1:17)
"you don't need to have your entry filled inside that Killzone window"

Kill Zone Function

(1:24)
"your order idea and your order placement needs to be considered at that time"

Timing Rules

11:30 Order Management Rule

(0:47)
"now what happens if it doesn't fill you by 11:30 pull the order"

(0:50)
"that's it don't put a you good to cancel just pull it"

Reason for Same-Day Entry

(0:55)
"because you want to be entering on the day that it creates this"

No Setup = No Trade

(1:29)
"if you can't derive a order placement for setup or trade entry by that time you have nothing to do and that's it"

(1:36)
"you basically taken no risk on and you have to wait till the next trading opportunity or trading day"

Risk Management - Relative Equal Highs

(0:57)
"because relative equal highs if if it doesn't drop off it could come up in at a time of day where you w really want to be there"

(1:04)
"and it could fill you and then keep on running and take out the relative equal high at a deeper pass and then stop you out"

Why Timing Matters

Entering at the wrong time of day exposes you to the risk that price could fill your limit entry, then reverse and take out relative equal highs above your stop loss before moving in your intended direction.

Study & Review

Click each card to reveal the answer (direct quotes from transcript)

What is an Order Block?

"it's a change in the state of delivery" (0:07)

"the algorithm changes its state of delivery" (0:08)

When does the algorithm change its state of delivery?

"as soon as we get below this candle's open the market starts delivering cell side and then it breaks this swing low so now we have changed gears internally" (0:10-0:17)

What is a suspect rally?

"any rally after that is just setting up another run to go lower" (0:19-0:22)

Why should you place your stop loss at the intermediate term swing high?

"so this is an intermediate term High swing High because it has the imbalance it should not trade higher than that high that's the reason why I'm telling you you can put your stop loss there" (0:28-0:35)

How do you execute the limit entry setup?

"you could be a seller here on a limit entry so you place your limit order here and you just walk away from it you let it go" (0:39-0:45)

What do you do if your limit order doesn't fill by 11:30?

"now what happens if it doesn't fill you by 11:30 pull the order that's it don't put a you good to cancel just pull it" (0:47-0:52)

Why pull the order if it doesn't fill by 11:30?

"because you want to be entering on the day that it creates this because relative equal highs if if it doesn't drop off it could come up in at a time of day where you w really want to be there and it could fill you and then keep on running and take out the relative equal high at a deeper pass and then stop you out" (0:55-1:09)

What is the true purpose of kill zones?

"kill zones are when you determine your entry and you place your orders and you walk away" (1:13-1:17)

Does your entry need to fill inside the kill zone window?

"you don't need to have your entry filled inside that Killzone window" (1:17-1:20)

What needs to happen during the kill zone time?

"your order idea and your order placement needs to be considered at that time" (1:24-1:26)

What should you do if you can't derive a setup by kill zone time?

"if you can't derive a order placement for setup or trade entry by that time you have nothing to do and that's it you basically taken no risk on and you have to wait till the next trading opportunity or trading day" (1:29-1:40)

What happens after the market "changed gears internally"?

"any rally after that is just setting up another run to go lower so words this is a suspect rally" (0:19-0:25)