Order Blocks
How to mark a valid order block, why it needs an FVG to be high-probability, and where to enter.
An order block (OB) is a point of interest: part of the premium & discount arrays (PDRA) we use for entries, alongside FVGs and inversion FVGs. It's the last opposite-color candle before an impulsive move.
Marking an order block
- Bullish OB: the last down-close (bearish) candle before an up-move.
- Bearish OB: the last up-close (bullish) candle before a down-move.
- Mark the candle BODY only. If several same-color candles sit together before the move, combine them.
Find the last down-close (red) candle right before the rally. Its body is the bullish order block.
Spot it: Last red candle before a strong up-move = the bullish OB (body only).
An OB needs an FVG
An order block is only high-probability when it overlaps or sits with an FVG (above, inside, or below for the matching direction). No FVG → treat it as low-probability.
If the OB is large, you can use its 50% as the entry. Stops go at the OB body or the swing low/high, with a 1:2 target. One reason many entries are taken inside FVGs is that order blocks are often NOT mitigated. 'Mitigated' means price returns and taps (wicks) back into the zone. An OB may never get mitigated, while the FVG gets tapped more often, so it fills more reliably.
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