Order block
A bullish order block is the last down candle before a strong rally that breaks structure; a bearish one is the last up candle before a strong drop.
Key points
- The idea: the area where a strong move started may attract price again when it returns.
- Stronger blocks formed after a sweep of an obvious high or low, with big-bodied candles that leave a fair value gap and break structure.
- The mean threshold is the 50% level of the block, used as a limit entry or as a line that should hold.
- Refining an H4 block to an M15 zone gives a smaller stop, but price may react higher up and leave you behind.
- It is a way of reading the chart, not a view of real bank orders.
How traders use it
- Find the impulsive move that broke structure and mark the last opposite candle before it.
- Wait for price to return to the block in the higher timeframe's direction.
- Invalidation: beyond the far edge of the block plus a buffer; reduce size if that stop is wide.
Watch out
- Calling every candle before any move an order block.
- Blocks with no break of structure.
- Reusing a block price has already revisited several times.
Key line: The last opposite candle before the impulse that broke structure.