PLAYBOOK #19 / 25
SMART MONEY CONCEPTS
Institutional Order Blocks: Locating Smart Money Footprints & Mitigation Zones
Target Win Rate
68% - 74%
Target RRR
1:3.0 to 1:6.0
Execution Bias
ORDER BLOCK MITIGATION
Timeframes
1H / 4H / Daily
1. What Is an Order Block?
An Order Block (OB) is the specific candlestick representing institutional inventory positioning prior to a Market Structure Shift (MSS):
- Bullish Order Block: The last down-close (bearish) candle immediately preceding an aggressive upward displacement that breaks previous market swing highs.
- Bearish Order Block: The last up-close (bullish) candle immediately preceding an aggressive downward displacement that breaks previous market swing lows.
2. The Mitigation Process & Order Entry
Institutions leave floating drawdown on the opposite orders used to manipulate liquidity. When price returns to the Order Block, institutions mitigate their losing hedges at break-even and inject massive primary direction orders.
Entry: Enter when price taps the Open or 50% Mean Threshold (MT) of the Order Block candle.
Stop Loss: 3 ticks beyond the high/low wick of the Order Block candle.
INSTITUTIONAL TRADE SPECIFICATION
Asset: EUR/USD (4-Hour Chart) • Bias: Bullish OB Mitigation
Entry: 1.0820 (OB Open) • Stop Loss: 1.0795 (25 Pips Risk)
Target 1: 1.0870 (1:2.0 RRR) • Target 2: 1.0945 (1:5.0 RRR)
Entry: 1.0820 (OB Open) • Stop Loss: 1.0795 (25 Pips Risk)
Target 1: 1.0870 (1:2.0 RRR) • Target 2: 1.0945 (1:5.0 RRR)
Target Win Rate
65% - 72%
Target RRR
1:3.0+
Execution Bias
CONFIRMATION