Order Blocks & Breaker Blocks [LuxAlgo]

9 במרץ 2023

The Order Blocks & Breaker Blocks indicator detects order blocks that can be turned into breaker blocks on the chart automatically once mitigated.

Users can determine the amount of bullish and bearish order/breaker blocks that display on their chart from within the settings menu.

🔶 SETTINGS

• Swing Lookback: Lookback period used for the detection of the swing points used to create order blocks.
  
• Show Last Bullish OB: Number of the most recent bullish order/breaker blocks to display on the chart.
  
• Show Last Bearish OB: Number of the most recent bearish order/breaker blocks to display on the chart.
  
• Use Candle Body: Allows users to use candle bodies as order block areas instead of the full candle range.
  

🔹 Style

• Show Historical Polarity Changes: Allows users to see labels indicating where a swing high/low previously occurred within a breaker block.
  

🔶 USAGE



We have published several scripts covering the detection of order blocks previously, however, the concept of breaker blocks was not yet introduced.

When price mitigates an order block, a breaker block is confirmed. We can eventually expect price to trade back to this breaker block offering a new trade opportunity.

We can see that this is similar to a change in polarity, where a support becomes a resistance after a breakout and vice versa.



This script highlights regular order blocks as solid extended areas on the chart and breaker blocks as dashed lines with dual-colored areas. The color change and dashed line starts at the location where the order block was mitigated.

Using a higher "Swing Lookback" setting will return longer term order/breaker blocks on the chart.



Users can optionally enable "Historical Polarity Changes" labels within the settings menu to see where breaker blocks might have provided an effective trade setup previously.

The "Historical Polarity Changes" setting is disabled by default & is most effective using replay mode as the labels are backpainted.

The order blocks & breaker blocks themselves can be used in real-time as they are detected based on the swing length & previous breaker blocks being mitigated.