Chapter 2 lesson 5 - Rejection blocks Flashcards
What is a rejection block?
It’s form of order block within the market place.
In a bearish scenario, an order block is the last up close candle with the highest high before a bearish price move.
In a bullish scenario, an order block is the last down close candle with the lowest close before a bullish price move.
How to identify a rejection block?
It forms within a swing high and swing lows, and occurs when there’s more wick than body.
It always lines up with an order block.
The rejection zone is within the wick.
How should you trade a rejection block?
Price will reject from the rejection area, so can be used as an entry point if the are other confluences.
Ona higher time frame, it can be used to determine bias. Always take profit when your trade runs into a rejection block.
Where will you typically find rejection blocks?
At the extreme end of the range, either extreme high or low.
