Core Concepts
ICT Order Blocks Explained: What They Are and How Traders Use Them
An order block is a chart concept used in ICT and related Smart Money Concepts education. Traders generally identify a candle or small area before an impulsive move and study whether price later reacts from that area.
Bullish and bearish order blocks
A bullish order block is commonly associated with the last bearish candle or bearish area before an upward displacement. A bearish order block is commonly associated with the last bullish candle or area before downward displacement. Exact definitions differ across educators.
Context matters
An order block becomes part of a trading idea only when the trader has defined context, such as market structure, liquidity and a directional hypothesis. Marking every opposite-color candle creates too many zones to be useful.
Define invalidation first
Before entry, decide what price action would invalidate the setup. A zone that is continually redefined after price moves against it cannot be tested objectively.
Order blocks and FVGs
Some traders use an order block together with a nearby FVG or displacement leg. Treat these as confluence rules to be tested, not as proof that an institution placed a specific order at that exact candle.
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