Order block (OB)

How to find one

Start from the move, not the candle. Find a strong push that breaks structure: a break of structure or a change of character. Then step back to the last candle that went the other way before it started.

• Bullish order block: the last down (red) candle before a strong rally. It is a possible buy zone if price returns.
• Bearish order block: the last up (green) candle before a strong drop. It is a possible sell zone.
• Several candles: if two or three same-colour candles sit before the move, most traders box them as one zone.

The usual explanation is that large traders filled part of a position there and may defend or add to it on a return. That is a story about why it might work; a chart can't show whose orders were filled.

Where traders disagree

The order block comes from ICT and smart-money teaching, and it has no single rule book. Three choices change what you mark:

• Body or wick. Wick to wick is the widest zone; the body alone is the tightest. Planning the entry from the body and the stop beyond the wick is a common compromise.
• How strong the move must be. Some want only a large candle; others also want a break of structure, a liquidity sweep just before it, or a fair value gap left behind.
• When it is used up. Many traders count a block once: after the first touch it is "mitigated". Others keep it until price closes through its far side.

StraviFX's glossary uses the plain version: the last opposing candle before an aggressive move away. Use the filters you like, but use the same ones every time, or your journal can't tell you whether they work.

A worked example

A 4-hour EUR/USD chart. The prices are an illustration, not real data.

• The block: after a dip, the last down candle opens at 1.0912, trades between 1.0918 and 1.0884, and closes at 1.0890. The next candle rallies to 1.0975 and closes above the last swing high at 1.0950. That down candle is a bullish order block, with a body of 1.0890–1.0912 and a wick low of 1.0884.
• Entry at the top of the body: a buy at 1.0912 when price returns, with the stop at 1.0879, 5 pips below the wick (33 pips of risk). The target is the new high at 1.0975, 63 pips away: a 1:1.91 risk-to-reward. On a $1,000 account risking 1% ($10), 33 pips at $10 a pip per standard lot gives 0.03 lots, risking $9.90.
• Entry at the middle of the block: a buy at 1.0901, halfway between 1.0918 and 1.0884, with the same stop, risks 22 pips for 74: 1:3.36, and 0.04 lots risking $8.80. Better numbers, but price may turn at 1.0912 and never fill the order.

A deeper entry improves the ratio and lowers the chance of a fill. The lot size calculator resizes the trade for whichever stop distance you choose.

Why it matters

An order block gives a pullback trade two things a beginner usually lacks: a specific area to wait for instead of chasing the move, and a clear point where the idea is wrong (beyond the far side of the block). That makes the stop a structural decision rather than a guess, and the lot size follows from it.

Common mistakes

• Marking every opposite candle. Every rally starts after some down candle. Without a strong move that breaks structure, it isn't an order block.
• Buying a bullish block in a downtrend. A block against the higher-timeframe trend is often run straight through. Check the bigger picture first.
• Putting the stop inside the block. Price often trades deep into the zone before turning. A stop at the middle gets taken on a normal test.
• Trading the third or fourth touch. Each visit uses up whatever orders were there. The first return is the one most traders plan for.

Questions

Order blocks in the app

On Premium's extended analysis, StraviFX places the stop just beyond the swing high or low, or the order block, whose break would prove the idea wrong, plus a buffer of about half the average candle range over the last 14 candles (ATR). It doesn't place stops inside recent candle noise. The hourly Swing signals check doesn't look for order blocks; it works from sweeps, breaks of structure and fair value gaps. Either way, the levels are a reading of the chart, not a prediction, and the decision stays with you.

Related terms

• Market structure: The sequence of swing highs and lows a market prints: rising is bullish, falling is bearish, neither is a range.
• Break of Structure (BOS): A candle close beyond the last swing high or low in the direction of the trend. It signals continuation.
• Change of Character (CHoCH): The first break against the trend: an uptrend closing below its last higher low, or a downtrend above its last lower high.
• Market Structure Shift (MSS): The confirmed flip that can follow a CHoCH: a failed swing in the old direction, then a close beyond the next swing.
• Swing high / swing low: A candle whose high is above its neighbours, or whose low is below them. The pivots every structure reading is measured from.
• Higher highs / higher lows: The four swing labels (HH, HL, LH, LL) and what each combination says: uptrend, downtrend or range.
• Range / consolidation: Price moving between a ceiling and a floor with no new highs or lows beyond them. A reason to wait, or to trade the edges.
• Retest: Price coming back to a level it has just closed beyond, to see whether the level now holds from the other side.
• Liquidity: Resting orders, mostly stop losses, that pool just beyond obvious highs, lows and round numbers. Price is often drawn toward them.
• Liquidity sweep / stop hunt: A push past an obvious high or low that triggers the stops there, then closes back inside. A close beyond is a breakout.
• Buy-side / sell-side liquidity: Buy orders resting above price (BSL) and sell orders resting below it (SSL). The pools a move is likely to travel toward.
• Equal highs / equal lows: Two or more highs or lows at nearly the same price. A flat edge that collects stops, so a common sweep target.
• Fair Value Gap (FVG): A three-candle gap where candle 1's high and candle 3's low don't overlap. Traded through fast, so often revisited.
• Breaker block: A failed order block that price closes through, then returns to from the other side, where it can act the opposite way.
• Mitigation block: A failed order block after a swing that fell short. Price breaks it, then returns from the other side as trapped traders exit.
• Supply / demand zone: The base a sharp move left from: demand below price, supply above. The first return to a fresh zone usually counts most.
• Premium / discount: A range split at its 50% midpoint, equilibrium. Buy in the discount half, sell in the premium half.
• Optimal Trade Entry (OTE): The 62–79% pullback of the last impulse leg. A deep entry that keeps the stop close and the target far.
• Entry: The price a trade opens at: market, limit or stop. With the stop and target fixed, it sets the risk and the reward.
• Stop loss: An order that closes the trade at a set price to cap the loss. It goes where the idea is proven wrong, plus a buffer.

See every term in the trading glossary.