Order Block

What an order block is

An order block is a concept from price-action analysis that points to one specific origin: the compact candle range that immediately preceded a strong, sustained move in a single direction. What defines it is the causal story attached to that exact range. The idea is that a concentration of buying or selling was committed there, and that this footprint is what set the subsequent move in motion. The concept is about identifying that originating range and the price action that came out of it, not about cataloging every level where price once paused.

How the concept is applied

A bullish order block is typically the last down-candle range before a strong rally began; a bearish order block is the last up-candle range before a sharp decline. Traders who use the concept mark that single range and watch whether price returns to it and how it behaves there. The emphasis is on the strength and immediacy of the move that followed the range, which is what practitioners use to distinguish an order block from an ordinary pause in price. Definitions vary widely between practitioners.

Limitations to keep in mind

Order blocks are subjective and are not standardized indicators. There is no way to confirm from a chart alone what orders actually sat at a range, so the term describes an interpretation of past price behavior rather than a verified fact. It is one lens among many and does not forecast future movement or guarantee any reaction if price returns.

How is an order block different from support and resistance?

They answer different questions. Support and resistance catalogs any price area where past trading paused a move, from many points in a chart's history. An order block names one specific candle range, the one that immediately launched a strong directional move, and attaches a causal story about order flow to that exact range. It is defined by the move that came out of it, not by a history of prior reactions.

Are order blocks a reliable signal?

No method is reliable on its own. Order blocks are subjective, defined differently by different traders, and describe past price action rather than predicting future moves. They should be studied as one interpretive tool, not a certainty.