Order block

What it is

An order block is the last candle against the move before a strong move that breaks structure. A bullish order block is the last down candle before the rally; a bearish order block is the last up candle before the drop.

The idea is that large orders were placed there, and price often comes back to that candle's range before continuing.

ICT's own definition is stricter than the popular one: the block is the down-close candle (for a bullish block) with the largest body near a support level, and it only counts once a later candle trades through that candle's high. An order block is close kin to a supply and demand base, refined down to one candle.

How to spot it

• Find a strong move that breaks structure (a BOS).
• Go back to the start of the move and take the last opposite-coloured candle. Its range (high to low, or open to low) is the order block.
• It is stronger if the move away left an FVG and swept liquidity first.

How to use it

• Wait for price to return to the order block and enter in the direction of the break.
• Stop just beyond the far side of the block. Target the high or low of the move, or the next liquidity.
• Many traders watch the block's 50% level (the mean threshold): a close through it weakens the block.

Common mistakes

• Marking any opposite candle as an order block, even without a structure break.
• Using order blocks that price has already traded back through.

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