Order Block

What is an order block?

An order block is defined by the last opposing candle before an impulsive move that breaks structure. A bearish order block is the last bullish candle before a strong move down. A bullish order block is the last bearish candle before a strong move up.

The idea: that last opposing candle is where institutions absorbed retail orders before reversing the market. The wick and body of that candle mark a zone where unfilled orders likely remain. When price returns to it, those orders defend the level.

How to qualify a valid order block

• The candle is the last opposing candle before the impulsive move.
• The impulse creates a clear break of structure (BoS) or market structure shift (MSS).
• The impulse leaves a Fair Value Gap — confirms displacement, not chop.
• The block sits at a meaningful level: previous day high/low, equal highs, premium/discount edge.

Without displacement (no FVG, no BoS), the candle is just a swing — not an order block.

How to trade an order block

1. Identify the impulsive move and the last opposing candle that preceded it.
2. Mark the high and low of that candle (some traders use just the body — both work, test which fits your sizing).
3. Wait for price to return. Enter on first touch with a limit order.
4. Stop loss beyond the far edge of the block.
5. Target: opposite liquidity pool or the FVG created by the original impulse.

Order block + FVG = highest probability

The strongest setup pairs an order block with the FVG sitting just above (bullish) or below (bearish). Price often reaches into the FVG, taps the order block, and reverses. Entering on the order block with the FVG as the secondary target gives a clean stop and a high-R trade.

Practice order blocks

Open NQ Replay on a Killzone session, identify the day's impulsive move, mark the last opposing candle before it, and step forward to see whether price returns and defends. Twenty sessions of reps will teach you which order blocks hold and which don't — the difference is almost always whether displacement was clean.