Strategy Library

Order Block

Trade the last institutional candle before a strong move.

An order block is the last opposing candle (or candle cluster) before price makes a strong impulsive move. Big institutions absorb liquidity there before driving price the other way, so when price returns to that zone there's a high probability of a reaction.

How to identify it

  1. Find a clear impulsive move (e.g. 80+ pip drop on XAUUSD H1).
  2. Walk back to the last bullish candle BEFORE the down-move (for sells) or last bearish before up-move (for buys).
  3. That candle's body — or the wick / open — becomes your zone.
  4. Wait for price to return to it. Enter on the first rejection (engulfing, pin bar, SFP).

Trading rules

  • Stop loss above/below the order block's extreme.
  • TP at the next opposing OB or recent swing high/low.
  • Skip if a major news event hits in the next 30 minutes.
  • Lower-timeframe OBs (M5/M15) need wider context — use H1/H4 to confirm direction.

Common pitfalls

  • Mitigated order blocks (price already touched it once) are weak — find a fresh one.
  • Trading every OB without filter — you need a clear higher-timeframe bias.
  • Wide stops on H4 OBs that wreck your risk-per-trade rule.

When to use it

Best in trending markets after a clear break of structure. Avoid during low-liquidity Asian session unless trading pairs with proper range.

Best pairs

XAUUSD, EURUSD, GBPJPY

Best session

London / New York overlap

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