Order Blocks 101: Institutional Footprints

An Order Block (OB) is a specific candlestick or price range where big banks have placed significant orders. It represents a "footprint" left by smart money before a major price expansion.

Types of Order Blocks

1. Bullish Order Block: The last down-close candle before an upward price expansion.
2. Bearish Order Block: The last up-close candle before a downward price expansion.

Validating an Order Block

Not every candle is an order block. To be valid, it generally requires:

• A displacement (strong move away from the block).
• Creation of an imbalance or Fair Value Gap nearby.
• A break of market structure.

Learn how to refine these entries in our Trading Course.

How to Trade Order Blocks

The ideal entry is often a "return to order block." When price revisits the price level where the institutional orders were originated, it often finds support or resistance there as the banks "mitigate" their remaining positions.

See how this integrates with the Market Structure Shift for even cleaner entries.