ORDER BLOCKS

An Order Block is the last opposing candle before a strong impulse move. It represents the candle where an institution was absorbing all retail orders — quietly filling their position against the crowd — before launching price in their intended direction. Bullish Order Block: • The last BEARISH (red) candle before a significant bullish move • ICT interpretations may describe this candle as an area of institutional buying; actual participant positioning cannot be confirmed from the candle alone. • The OB zone = the body of that last bearish candle (open to close) • Price may revisit this zone and react, but the response should be treated as a testable outcome rather than an expectation Bearish Order Block: • The last BULLISH (green) candle before a significant bearish move • ICT interpretations may describe this candle as an area of institutional selling; actual participant positioning cannot be confirmed from the candle alone. • The OB zone = the body of that last bullish candle • Price returns here as resistance In this ICT-style framework, traders may define an OB confirmation using a BOS/ChoCH, an FVG, and displacement; these are model criteria to test rather than universal validation rules.

Not every candle before a move is a valid Order Block. ICT gives specific criteria for validity: 1. Some ICT traders look for displacement after an OB, often accompanied by large directional candles and FVGs. A slower move may be treated differently depending on the model; test the rule rather than assume it is universally valid. 2. The move must include a BOS or ChoCH — confirming that structure shifted after the OB candle. This is interpreted within the ICT model as evidence of a potential structural shift; institutional intent cannot be confirmed from chart structure alone. 3. Mitigation threshold — once price returns to the OB, it should react within the body of the OB candle. Specifically, ICT says a bullish OB is valid if price holds above the 50% level of the OB candle (the midpoint between open and close). 4. Volume context — higher volume on the OB candle and the displacement move adds validity. 5. Higher-timeframe alignment — some traders use a Daily OB as context for a 5-minute OB. Whether this adds value depends on the model and should be tested. Always record the timeframe of the OB.

ICT has developed several OB variations over the years: Breaker Block: An Order Block that FAILED. When price returns to an OB and instead of reversing, it blasts through — that OB is now a Breaker Block. In a bullish scenario: a bearish OB that gets violated to the upside becomes a support zone (breaker). Within the ICT interpretation, a breaker may be discussed as a former OB that changes role after being violated; the chart alone cannot confirm that institutions defended or added to a position. Mitigation Block: When an OB is partially filled — price enters the OB but not fully. ICT considers partially mitigated OBs as still valid for future tests. Rejection Block: The WICK of a candle before a strong move, rather than the body. When price creates a long wick before launching, that wick zone is a rejection block — slightly different from a standard OB. Hidden OB: An OB that exists on a higher timeframe but is not visible when looking at a lower timeframe alone. Requires multi-timeframe analysis to identify. Reclaimed OB (2024): If an OB gets swept through but price quickly returns inside it — the OB is "reclaimed" and is still valid for trading.

Both can be studied as potential entry zones within the framework, but they are fundamentally different: Order Block = WHERE institutions entered (the candle they used to build their position). It's about position accumulation. Fair Value Gap = WHERE price moved too fast and left an imbalance. It's about price inefficiency. An OB that overlaps an FVG is one commonly studied ICT confluence pattern; whether it improves outcomes should be tested. ICT calls this a "confluence" zone. When an Order Block and FVG overlap, traders may treat the combination as additional confluence; its effectiveness should be tested rather than assumed. How to determine which to use: • OBs are better for swing trades and higher timeframe setups • FVGs are better for intraday precision entries on 5m/15m • When they overlap, some traders treat the area as additional confluence; confidence and performance should be evaluated rather than assumed. • Consider both as part of the checklist if your tested strategy uses them.