Note the bottom grey . This is just something I wanted to bring up because it came about when I was looking at this USDOLLAR chart. Previously we had a candle into a down move (on the left of the chart). Note that price on the candle where the arrow points is exactly where the accumulation candle opened previously. This means that there were still a few buyers at that level where that previous candle was (or at least some people wanting to buy at that level). Now note the pink candle. This is a 4H mitigation orderblock, where price has previously been into this level, broken through and could come back to this level to be again very quickly (I would expect at the lower pink line as there is an orderblock there and it would created a ).
The same occurs with the other grey . except price is fully mitigated at this level and turns .
Why do accumulation candles occur? They occur when price begins to run out of steam in one direction and new buyers or sellers are found. Then, further orders are placed at the price in the original direction (in this case the higher price where the accumulation candle closes at) and price continues down again, because people consider this a better price to enter with the trend at again. A lot of the time this may be institutional buying to entice further longs or shorts in to take price in their original direction again.
Orderblocks can be considered dynamic points. These are plotted at swing points on every timeframe, where price breaks the previous or candle. So if we had a trend reversal to bearishness, where the previous candle is broken would be where you plot your orderblock line from.
I hope this made sense, as it can be a confusing concept. I really just wanted to identify how precisely price stops at these levels in the future, so it's something to watch out for. PM me if you have any trouble understanding or have any questions. Thanks.
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