While limit order entries at order blocks offer the best prices, they also have the highest stop-out rate. The Order Block Confirmation entry model sacrifices some entry price for fewer immediate stop-outs by waiting for the market to confirm institutional defense.
The Confirmation Concept
Instead of blindly entering at an order block, this model waits for evidence that the block is being defended. This evidence can take multiple forms:
A reversal candle at the block. A lower timeframe CHOCH within the block. Order Flow showing absorption or reversal. Any combination of these signals.
By waiting for confirmation, you reduce the number of trades that run through your stop immediately.
Setup Requirements
1. Valid Order Block:
Clearly defined order block on your trading timeframe. Caused a break of structure when it formed. Aligned with higher timeframe direction.
2. Price Reaches the Block:
Price retraces into the order block zone. Preferably first or second test (fresh blocks are better).
3. Wait for Confirmation:
Do not enter immediately. Wait for confirming signal within the block zone.
Confirmation Types
Type 1: Reversal Candle Confirmation
Wait for a strong reversal candle within the order block. For bullish OB: bullish engulfing, hammer, or strong bullish candle. For bearish OB: bearish engulfing, shooting star, or strong bearish candle.
Entry: At close of reversal candle. Stop: Beyond the order block. Target: Structure high/low and beyond.
Type 2: Lower Timeframe CHOCH Confirmation
As price enters the order block, drop to a lower timeframe. Wait for a Change of Character (CHOCH) confirming your direction. This shows the lower timeframe structure has shifted.
Entry: At the close of the lower timeframe candle that confirms the CHOCH. Stop: Beyond the CHOCH origin (the lower timeframe swing the breaking move started from), which can sit inside the block; tighter, but hit more often. Target: Based on trading timeframe structure.
Type 3: Order Flow Confirmation
Watch Order Flow as price tests the block. Look for: absorption at the block level, delta shifting in your direction, stacked imbalances supporting your thesis.
Entry: After Order Flow confirms defense. Stop: Beyond the order block. Target: Structure high/low and beyond.
Bullish OB Confirmation Entry
Step 1: Mark bullish order block on 15M chart. Higher timeframe is bullish.
Step 2: Wait for price to retrace into the order block.
Step 3: Choose confirmation method:
Option A: Wait for bullish engulfing within the OB on 15M. Option B: Drop to 5M and wait for CHOCH. Option C: Watch for buying absorption on footprint (sells absorbed by resting bids).
Step 4: Enter after confirmation. Stop below the OB low (Options A and C) or below the 5M CHOCH origin (Option B). Target the previous high and beyond.
Bearish OB Confirmation Entry
Step 1: Mark bearish order block on 15M chart. Higher timeframe is bearish.
Step 2: Wait for price to retrace into the order block.
Step 3: Choose confirmation method:
Option A: Wait for bearish engulfing within the OB on 15M. Option B: Drop to 5M and wait for CHOCH. Option C: Watch for selling absorption on footprint (buys absorbed by resting offers).
Step 4: Enter after confirmation. Stop above the OB high (Options A and C) or above the 5M CHOCH origin (Option B). Target the previous low and beyond.
Trade-Offs
Advantages of Confirmation Entry:
Fewer immediate stop-outs: you only trade blocks that show defense. Smaller stops possible when using LTF CHOCH confirmation. Psychological comfort of seeing defense before committing.
Disadvantages:
Worse average entry price. Some valid trades will leave without you (price rejects before confirmation). More time spent waiting and monitoring.
Best Practices
Multiple Confirmations: The more confirmations aligned, the stronger the setup. Reversal candle + Order Flow absorption + higher timeframe alignment = three confluence factors; grade the setup with the six-factor confluence checklist (5-6 = A+).
Time Filter: Require confirmation during killzones for best results. Asian session confirmations are less reliable.
Fresh Blocks: First test of an order block typically provides the best confirmation trades. Multiply-tested blocks may fail even with confirmation.
Key Takeaways
Confirmation entries sacrifice price for evidence of defense. Wait for reversal candles, LTF CHOCH, or Order Flow signals within the order block. This approach reduces stop-outs but may miss some trades. Multiple confirmations make the setup stronger. Best used on fresh order blocks during killzone times. Higher timeframe alignment is still essential.