Order blocks: a clear definition and Pine Script v6 code

//@version=6
indicator("Order blocks from breaks of structure", shorttitle = "Order blocks", overlay = true, max_boxes_count = 500)

swingLen   = input.int(5, "Swing strength (bars on each side)", minval = 1, maxval = 50, group = "Detection")
lookback   = input.int(10, "Bars searched for the last opposite candle", minval = 1, maxval = 50, group = "Detection")
maxOpen    = input.int(5, "Active blocks to keep per side", minval = 1, maxval = 50, group = "Display")
keepUsed   = input.bool(true, "Keep mitigated blocks on the chart", group = "Display")
showSwings = input.bool(true, "Mark confirmed swing points", group = "Display")
bullCol    = input.color(color.teal, "Bullish block", group = "Display")
bearCol    = input.color(color.red, "Bearish block", group = "Display")

// Swings are pivots: confirmed only swingLen bars after the high or low itself.
ph = ta.pivothigh(high, swingLen, swingLen)
pl = ta.pivotlow(low, swingLen, swingLen)

var float swingHigh = na
var float swingLow  = na
var bool  highUsed  = true
var bool  lowUsed   = true
var array<box> bullBlocks = array.new<box>()
var array<box> bearBlocks = array.new<box>()

newBull   = false
newBear   = false
touchBull = false
touchBear = false

if barstate.isconfirmed
    if not na(ph)
        swingHigh := ph
        highUsed  := false
    if not na(pl)
        swingLow := pl
        lowUsed  := false

    // A block is mitigated the first time price trades back into it; it then stops extending.
    if bullBlocks.size() > 0
        for i = bullBlocks.size() - 1 to 0
            b = bullBlocks.get(i)
            b.set_right(bar_index)
            if low <= b.get_top()
                touchBull := true
                if keepUsed
                    b.set_bgcolor(color.new(color.gray, 88))
                    b.set_border_color(color.new(color.gray, 70))
                else
                    b.delete()
                bullBlocks.remove(i)
    if bearBlocks.size() > 0
        for i = bearBlocks.size() - 1 to 0
            b = bearBlocks.get(i)
            b.set_right(bar_index)
            if high >= b.get_bottom()
                touchBear := true
                if keepUsed
                    b.set_bgcolor(color.new(color.gray, 88))
                    b.set_border_color(color.new(color.gray, 70))
                else
                    b.delete()
                bearBlocks.remove(i)

    // Bullish break of structure: first close above the latest swing high. The block is the last down candle before it.
    if not highUsed and close > swingHigh
        highUsed := true
        for j = 1 to lookback
            if close[j] < open[j]
                bullBlocks.push(box.new(bar_index - j, high[j], bar_index, low[j], border_color = bullCol, bgcolor = color.new(bullCol, 85)))
                newBull := true
                break
        if bullBlocks.size() > maxOpen
            bullBlocks.shift().delete()

    // Bearish break of structure: first close below the latest swing low. The block is the last up candle before it.
    if not lowUsed and close < swingLow
        lowUsed := true
        for j = 1 to lookback
            if close[j] > open[j]
                bearBlocks.push(box.new(bar_index - j, high[j], bar_index, low[j], border_color = bearCol, bgcolor = color.new(bearCol, 85)))
                newBear := true
                break
        if bearBlocks.size() > maxOpen
            bearBlocks.shift().delete()

plotshape(showSwings and not na(ph), "Swing high", shape.circle, location.abovebar, color.new(color.gray, 30), offset = -swingLen, size = size.tiny)
plotshape(showSwings and not na(pl), "Swing low", shape.circle, location.belowbar, color.new(color.gray, 30), offset = -swingLen, size = size.tiny)

alertcondition(newBull, "New bullish order block", "Close above the last swing high created a bullish order block on {{ticker}} ({{interval}})")
alertcondition(newBear, "New bearish order block", "Close below the last swing low created a bearish order block on {{ticker}} ({{interval}})")
alertcondition(touchBull, "Price returns to a bullish block", "Price traded back into a bullish order block on {{ticker}} ({{interval}})")
alertcondition(touchBear, "Price returns to a bearish block", "Price traded back into a bearish order block on {{ticker}} ({{interval}})")