Market StructureIntermediate#Technical Analysis#SMC#Institutional
Order Block (OB)
O
Definition
The last candle in the opposite direction before a strong directional expansion, marking institutional entry points.
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Concept Diagram
Key Takeaways
1
Order blocks are the last bearish candle before a strong bullish move or the last bullish before a bearish move
2
They represent areas where institutional orders were placed creating strong supply or demand zones
3
Price often returns to order blocks before continuing in the trend direction
4
Bullish OBs act as support on retests while bearish OBs act as resistance
Practical Example
A large red candle at $60K is followed by a massive green impulse to $63K. That red candle is a bullish order block. When price later retraces to $60K, it bounces — confirming the institutional demand zone.
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Related Terms
Trading
FVG (Fair Value Gap)An imbalance in price move shown by a gap between candles, often filled as price seeks to rebalance liquidity.
Trading
Liquidity SweepA sharp price movement used to trigger stop losses before reversing, generating the liquidity needed for large institutional positions.
Market Structure
Market Structure Break (MSB)When price breaks the previous valid high/low, signaling a potential shift in the primary market trend.
Market Structure
Mitigation BlockA failed order block that didn't hold price but now acts as a future support or resistance level.
Market Structure
Breaker BlockSimilar to a mitigation block, but it involves a stop hunt (liquidity grab) before the structure is broken.
Market Structure
Institutional Funding CandleA specific candle that marks where a large institution began to fund a massive move, often serving as a future 'Point of Interest'.
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