Trading book Order Block

🧱 What is an order block? An order block (OB) is the last bullish or bearish candle before a strong countertrend movement. This is the place where institutions or banks entered in large quantities and triggered the price. Types of order blocks: 1. Bullish Order Block (OB): This is the last bearish candle before the price surges sharply upward. We expect support and a retest for a buy entry. 2. Bearish Order Block (OB): This is the last bullish candle before a strong decline. We expect resistance and a sell entry opportunity. ✅ Conditions for a Correct Order Block: It occurs before a strong movement (Break of Structure - BOS or Change of Character - ChoCh) After which the market structure is broken (Structure Break = confirmation of institutional entry) It often includes: FVG (Price Gap) Strong Volume Liquidity taken before the breakout ❌ Weak Order Blocks: They occur without a breakout of the structure. They do not contain high or negative volume. There is no price reaction on the retest. They do not fall within the Golden Fibonacci areas (0.618 - 0.705). 🧠 How to Use OB in a Strategy? Example: Combining with ICT: Identify a Liquidity Sweep (e.g., a clear Low or High). Then, observe the next OB and the market's breakout from it. Wait for the price to return to the OB (a retest). Confirmation with: Price Action Candle Positive Delta in Order Flow Supporting Fibonacci Level 🔍 Tools to Help You: The best timeframe for observing the OB is 15m to 4h for analysis, and 1m to 5m for entry. Use a Volume Profile or Footprint Chart to measure flow volume. Ensure there is an FVG, Breaker, or Mitigation Block near the OB.