Automating Order Block Detection: Encoding Institutional Liquidity and Fair Value Gaps in MQL5

De-Mystifying "Smart Money Concepts"

Much of retail "SMC" trading is shrouded in esoteric terminology. In computational reality, an "Order Block" is simply a price region where substantial institutional limit liquidity was absorbed prior to an aggressive directional momentum displacement.

The Four Algorithmic Rules for Valid Order Blocks

1. The Origin Candle: The last bearish candle prior to a directional impulse wave.
2. The Displacement Filter: The subsequent impulse wave must break the previous Swing High with a candle body length at least 2.2× the 14-period ATR. Without displacement, no institutional volume was committed.
3. Fair Value Gap (FVG) Confirmation: The low of candle i+2 must remain above the high of candle i, confirming an imbalance zone.
4. Mitigation Tracking: Once price retraces and touches the upper boundary of the order block, its status transitions from Unmitigated to Mitigated, preventing duplicate re-entries.