Rejection Blocks

The long-wick swing low that reversals often start from — the three conditions it needs, where to mark it, and when it is dead. This free lesson covers: What a rejection block is, "Long" needs a number, Which one qualifies?, Work it out, A wick alone is not enough, Mark the block, The trade, Work it out, When the block is dead, Shorts: the same, flipped, Put it together.

Going deeper

More on rejection blocks

This lesson is the long form of the "How to predict reversals" Reel. "Predict" is shorthand: a rejection block marks where a reversal is more likely to start, not where one will.

The 2× wick-to-body rule and the change-of-character requirement are there to make a loose idea testable. Without numbers, "long wick" and "strong move" can be read into almost any chart after the fact.

Common mistakes4
  • Marking every wick as a block without checking the 2× rule or waiting for the break.
  • Drawing the block from the wick's low to the candle's high, which includes the body and makes the stop far wider than it needs to be.
  • Taking the third or fourth touch of the same block as confidently as the first.
  • Holding on after a candle closes through the block.
From experience2
  • Check the reward-to-risk before the touch arrives. If the high is too close to justify the stop, skip it.
  • On US30, blocks formed during the New York session tend to be more meaningful than those formed in thin overnight trading.
Questions people ask2

Is a rejection block the same as an order block?

They are related ideas from the same family of price-action methods. As defined here, the rejection block uses only the wick — the part of the candle price refused — rather than the whole candle.

Has this been backtested?

Not here yet. The rules in this lesson are precise enough to code, which is the first step.