Order Blocks (OB)
Quick Definition
The specific candlestick or price consolidation zone where institutional market makers accumulated or distributed large volume prior to an aggressive displacement move.
Detailed Explanation
A Bullish Order Block is the last down candle before an energetic upward price expansion that breaks market structure. When price returns to this zone, unfilled limit orders frequently trigger a high-probability bounce.
Key Trading Rules & Takeaways
- Represents footprints of institutional institutional volume.
- Valid only if followed by aggressive market structure displacement.
- Commonly used as optimal entry zones for automated price action robots.
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Frequently Asked Questions
How do you identify a valid Order Block?
Look for the last opposing candle immediately prior to an impulsive move that creates an imbalance (FVG) and breaks a previous swing high/low.