Order blocks - Areas of interest

One of the most common mistakes that beginner traders make is ignoring areas of interest, also known as order blocks. A lack of understanding of these levels leads to improper market entry. For example, imagine you have a capital of 15,000 PLN. You decide to buy stocks without considering order blocks, and you lose 3% on each trade due to slippage and a large spread. Over the course of a month, your losses could amount to as much as 450 PLN. Another mistake is not taking these levels into account when setting a stop loss, which often results in orders not being filled and greater losses. For example, with a stop loss set 2% below the purchase price, the potential loss could be 300 PLN if the market does not react as expected.

Order blocks are places where financial institutions place large orders. Ignoring these levels means you are acting against the biggest players in the market, which decreases your chances of a profitable trade. The mechanism of this phenomenon is that large volumes of orders cause price reactions that are difficult to predict without understanding the zones of interest. If you do not take these levels into account, you risk opening positions at a time when the price may quickly bounce back in the opposite direction.

If you have a capital of 10,000 PLN and regularly ignore order blocks, your losses can quickly accumulate. Let's assume you make 10 transactions a month, and each of them ends with a loss of 3% due to a lack of understanding of institutional levels. In such a scenario, the monthly loss amounts to 3,000 PLN. If such practices continue, you could lose as much as 36,000 PLN over the course of a year, which represents 360% of your initial capital.

To improve your results, start with:

• Understanding what order blocks are and how they affect price movements.
• Analyzing charts for areas of interest before each trade.
• Setting orders with greater precision, taking into account slippage and spreads.
• Testing strategies on a demo account to minimize the risk of losses.
• Continuous education, e.g., through webinars, to better understand market dynamics.

Start analyzing order block levels on charts daily.