Tradable vs Non-Tradable Order Blocks

In the world of financial markets, order blocks play a crucial role in executing trades and determining market movements. They represent areas of supply and demand where traders place their buy or sell orders. Order blocks can be categorized into two main types: tradable and non-tradable. Understanding the difference between these two types is essential for traders to make informed decisions and navigate the complexities of the market. In this article, we will explore the characteristics of tradable and non-tradable order blocks and how they impact trading strategies.

Tradable vs Non-Tradable Order Blocks
Tradable vs Non-Tradable Order Blocks

What are Order Blocks?

Before delving into the difference between tradable and non-tradable order blocks, let’s briefly define what order blocks are. An order block is a price range on a chart where significant buying or selling activity has taken place. These blocks are formed when a cluster of orders is executed at a particular price level, creating a visible area of support or resistance.

Order Block Example
Order Block Example

Tradable Order Blocks

Tradable order blocks, as the name suggests, represent price levels where traders can enter or exit positions. These blocks typically occur at key support and resistance levels, trend lines, or other technical analysis points of interest. Tradable order blocks are considered significant because they attract market participants, resulting in increased trading activity.

When a tradable order block is formed, it can act as a catalyst for market movement. Traders closely monitor these blocks to identify potential buying or selling opportunities. A breakout above a tradable order block’s resistance level can signal an upward trend, while a breakdown below its support level can indicate a downward trend. Traders often use various technical indicators and chart patterns to confirm the validity of a tradable order block and plan their trading strategies accordingly.

Non-Tradable Order Blocks

On the other hand, non-tradable order blocks are areas on a chart where significant buying or selling activity has occurred but do not present immediate trading opportunities. These blocks are formed due to factors such as large institutional orders, central bank interventions, or other market-moving events.


Non-tradable order blocks are often characterized by high volatility and large price swings. They represent a temporary imbalance between supply and demand and are usually followed by a period of consolidation or price correction. Traders typically avoid entering trades within non-tradable order blocks as the risk of sudden reversals and unpredictable price movements is higher.

However, non-tradable order blocks can still provide valuable information to traders. By observing the behavior of price action around these blocks, traders can gain insights into market sentiment and potential future trends. Non-tradable order blocks can act as reference points for future trading decisions and help traders anticipate key levels of support and resistance.

Differentiating Tradable and Non-Tradable Order Blocks

While both tradable and non-tradable order blocks represent areas of significant buying or selling activity, the key difference lies in their immediate tradability. Tradable order blocks offer actionable trading opportunities, while non-tradable order blocks are more informative in nature and require further confirmation before considering trades.

Traders should be cautious when interpreting order blocks and avoid mistaking non-tradable order blocks for immediate trading signals. It is crucial to consider other technical analysis tools, such as indicators, chart patterns, and volume analysis, to confirm the validity of a tradable order block before executing trades.

Incorporating Order Blocks into Trading Strategies

Order blocks, especially tradable ones, can be an invaluable tool in developing trading strategies. By identifying and analyzing tradable order blocks, traders can establish entry and exit points, set stop-loss and take-profit levels, and manage risk more effectively.


A popular approach is to combine order block analysis with other technical indicators or trading methods. For example, traders might look for confluence between a tradable order block and a Fibonacci retracement level or a trend line. This combination of tools can enhance the accuracy and reliability of trading signals.

Conclusion

Understanding the distinction between tradable and non-tradable order blocks is essential for traders navigating the financial markets. Tradable order blocks provide immediate trading opportunities, while non-tradable order blocks offer valuable information for future trading decisions. By incorporating order block analysis into their trading strategies and confirming the validity of these blocks through technical analysis, traders can make more informed decisions and improve their chances of success in the market. Remember, a thorough understanding of order blocks and their characteristics is a crucial step toward becoming a skilled and disciplined trader.

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