What is Order Block?
A consolidation zone on a chart where institutional traders are believed to have accumulated positions before a directional move.
An order block is a chart zone (a candle or cluster of candles in consolidation) immediately preceding a strong directional move, interpreted in Smart Money Concepts (SMC) and ICT trading as the area where institutions accumulated their position before pushing price.
Bullish order block: the last bearish candle (or consolidation zone) before a strong move up. Traders mark it as a buy zone — the theory is that institutions will defend it on retest. Bearish order block: the last bullish candle before a strong move down. Marked as a sell zone.
Order blocks work best on higher timeframes (4H, daily, weekly) where institutional flow is most influential. On lower timeframes the noise dominates. Effective use requires combining OBs with confluence (support/resistance, Fibonacci levels, time-of-day filters) and strict invalidation rules — if price breaks through the OB without bouncing, the trade idea is dead.