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Rejection Candle Detector
Using the Rejection Candle Detector with Order Blocks
Plotting Order Blocks:
Identify Key Levels: Begin by identifying key levels on the chart where large buying or selling activity has taken place. These areas are often referred to as order blocks.
Draw the Blocks: Use horizontal lines or rectangular zones to mark these order blocks on your chart. These levels will act as potential support or resistance areas where price is likely to react.
Setting Up the Rejection Candle Detector:
Apply the Indicator: Add the Rejection Candle Detector to your TradingView chart.
Customize Settings: Adjust the look-back period, label colors, and transparency according to your preferences.
Monitoring Price Action:
Wait for Price to Reach an Order Block: Monitor the chart for when the price approaches one of your predefined order blocks.
Look for Rejection Candles: The Rejection Candle Detector will help you identify rejection candlestick patterns within the look-back period (default is 10 bars).
Entry Decision:
Confirm Rejection: Once the price touches an order block and a rejection candle is detected by the indicator, this could signal a potential entry point. Rejection candles indicate that the price tried to move past the order block but was pushed back, showing strong resistance or support at that level.
Align with Your Analysis: Ensure that the detected rejection candle aligns with your overall trading analysis and strategy. Consider other factors such as trend direction, volume, and market conditions before making an entry.
Managing the Trade:
Set Stop Loss: Place a stop loss just beyond the order block to manage your risk in case the price breaks through the level.
Target Levels: Define your target levels for taking profit based on the next significant support or resistance levels on the chart.
Monitor and Adjust: Continue to monitor the trade and adjust your stop loss or take profit levels as needed based on price action and market conditions.
Example Scenario:
Order Block: You identify an order block at the $50 level on your chart, marking it as a potential support zone.
Price Reaction: Price approaches and tests the $50 level.
Rejection Candle: The Rejection Candle Detector spots a hammer candlestick (a bullish rejection pattern) forming right at the $50 level.
Entry Point: You decide to enter a long trade at the close of the hammer candle, setting your stop loss just below the $50 level.
Trade Management: Set your target at the next resistance level, say $55, and monitor the trade, adjusting as necessary...
Plotting Order Blocks:
Identify Key Levels: Begin by identifying key levels on the chart where large buying or selling activity has taken place. These areas are often referred to as order blocks.
Draw the Blocks: Use horizontal lines or rectangular zones to mark these order blocks on your chart. These levels will act as potential support or resistance areas where price is likely to react.
Setting Up the Rejection Candle Detector:
Apply the Indicator: Add the Rejection Candle Detector to your TradingView chart.
Customize Settings: Adjust the look-back period, label colors, and transparency according to your preferences.
Monitoring Price Action:
Wait for Price to Reach an Order Block: Monitor the chart for when the price approaches one of your predefined order blocks.
Look for Rejection Candles: The Rejection Candle Detector will help you identify rejection candlestick patterns within the look-back period (default is 10 bars).
Entry Decision:
Confirm Rejection: Once the price touches an order block and a rejection candle is detected by the indicator, this could signal a potential entry point. Rejection candles indicate that the price tried to move past the order block but was pushed back, showing strong resistance or support at that level.
Align with Your Analysis: Ensure that the detected rejection candle aligns with your overall trading analysis and strategy. Consider other factors such as trend direction, volume, and market conditions before making an entry.
Managing the Trade:
Set Stop Loss: Place a stop loss just beyond the order block to manage your risk in case the price breaks through the level.
Target Levels: Define your target levels for taking profit based on the next significant support or resistance levels on the chart.
Monitor and Adjust: Continue to monitor the trade and adjust your stop loss or take profit levels as needed based on price action and market conditions.
Example Scenario:
Order Block: You identify an order block at the $50 level on your chart, marking it as a potential support zone.
Price Reaction: Price approaches and tests the $50 level.
Rejection Candle: The Rejection Candle Detector spots a hammer candlestick (a bullish rejection pattern) forming right at the $50 level.
Entry Point: You decide to enter a long trade at the close of the hammer candle, setting your stop loss just below the $50 level.
Trade Management: Set your target at the next resistance level, say $55, and monitor the trade, adjusting as necessary...
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