Order Block Detector (OBD): How to Read and Trade Order Blocks

Overview

The Order Block Detector finds the price zones where big, institutional-sized activity most likely happened — the areas professional traders call "order blocks." Instead of looking at price alone, it watches for an unusually large spike in volume (a volume pivot) and marks the candle where that spike occurred. The idea is simple: where a lot of volume traded, large players left resting orders, and price often reacts again when it returns to that zone.

On the SAHI chart it draws coloured rectangles (boxes) that stretch to the right. Green boxes are bullish order blocks (likely demand / buying zones, usually sitting below price); red boxes are bearish order blocks (likely supply / selling zones, usually sitting above price). A thin line runs through the middle of each box marking its average price. A box stays on the chart until price trades through it, called "mitigation" — at which point it is removed.

How to Read the Indicator

Bullish Order Blocks (green boxes)

A green box marks a demand zone — a place where heavy buying volume showed up earlier and price rose afterward. These usually sit below the current price. When price falls back down into a green box, it is re-testing that demand. Watch for price to slow down and bounce inside the box — that is buyers defending the zone again.

Bearish Order Blocks (red boxes)

A red box marks a supply zone — a place where heavy selling volume showed up earlier and price fell afterward. These usually sit above the current price. When price rises into a red box, it is re-testing that supply. Watch for price to stall and turn down inside the box — that is sellers defending the zone again.

The Average Line

The thin line through the middle of each box is the zone's average price (its midpoint). It is a useful reference inside the zone — price often reacts right around this midline. Think of the midline as the "heart" of the zone and the box edges as its outer boundaries.

Box Extension and Mitigation

Each box automatically extends to the right as new candles form, so the zone is always visible in front of live price. A box is removed the moment price trades through the far side of it — for a green (bullish) box that means a candle going below its bottom; for a red (bearish) box, a candle going above its top. This is "mitigation," and it means the zone has been used up. Do not keep trading a zone that has disappeared. Whether mitigation is judged by the candle's wick or its close is set in the panel (see below).

Example Scenarios

Scenario 1 — Price bounces off a green zone, buy a CE (bullish)

Nifty is trading around 24,950. Below price there is a green order block from 24,880 to 24,910 (a demand zone). Nifty drifts down and the next candle dips into 24,900 — right inside the green box — then closes back up as a green candle. That bounce inside the zone is your cue that buyers are defending it.

• What you do: buy 1 lot of Nifty 25,000 CE at a premium of about ₹110.
• Stop loss: if a candle closes below 24,870 (under the box), the zone has failed — exit. The premium would be around ₹70 there, so your risk is roughly ₹40 per unit.
• Target: the recent high near 25,040. If Nifty reaches it, the CE premium would be roughly ₹160.
• Why it works: you entered exactly where heavy buying happened before, with a tight, clear exit just under the zone.

Scenario 2 — Price stalls at a red zone, buy a PE (bearish)

Nifty is climbing and trading around 25,020. Above price there is a red order block from 25,060 to 25,090 (a supply zone). Nifty pushes up into 25,070 — inside the red box — and that candle forms a long upper wick and closes red. That rejection inside the zone is your cue that sellers are defending it.

• What you do: buy 1 lot of Nifty 25,000 PE at a premium of about ₹95.
• Stop loss: if a candle closes above 25,100 (over the box), the zone has failed — exit. The premium would be about ₹62 there.
• Target: back down to 24,960, where the PE premium would be roughly ₹140.
• Why it works: you sold into proven supply, with your risk capped just above the zone.

Scenario 3 — What to avoid

• Do not buy just because a box exists. A zone is a level, not a signal. Wait for price to actually reach the box AND show a reaction candle — a bounce in a green box, a rejection in a red box. Buying while price is still far from the zone is guessing.
• Do not trade a zone that has already been mitigated. Once a candle closes through the far side, the box disappears — that zone is used up and no longer reliable. Chasing a broken zone is a common beginner mistake.
• Be careful on strong trend days. When Nifty is running hard in one direction, price can blow straight through zones without reacting. Give zones less weight in a fast one-way market, or wait for a clean reaction candle.

Settings Panel Guide

Detection

• Volume Pivot Length: how many bars on each side are checked to confirm a volume spike (a pivot). Default is 5. A larger number finds fewer but more significant zones; a smaller number finds more zones, some of them minor. For Nifty / BankNifty intraday, 5 is a solid starting point.
• Mitigation Methods: how the indicator decides a zone is used up and removes it. Wick (default) removes the zone as soon as any wick pierces the far side — stricter, fewer zones survive. Close removes it only when a candle closes through — more lenient, zones last longer. Use Wick for cleaner charts, Close if you want zones to persist through noise.

Bullish Order Blocks

• Bullish OB (count): how many of the most recent bullish (green) zones to keep on the chart. Default is 3. Increase to see more historical demand zones; decrease for a cleaner chart.
• Colours (3 swatches): the box fill, the box border, and the average-line colour for bullish zones. Defaults are green shades. Cosmetic only.

Bearish Order Blocks

• Bearish OB (count): how many of the most recent bearish (red) zones to keep on the chart. Default is 3. Same idea as above, for supply zones.
• Colours (3 swatches): box fill, border, and average-line colour for bearish zones. Defaults are red shades. Cosmetic only.

Display

• Average Line Width: thickness of the midline drawn through each box. Default is 1. Increase if you want the midline more visible.