Order block: what it is and how to spot one
By Bec, futures trader and founder of Wildflower · Updated
An order block is the last candle that moved the other way before a strong move. Before a strong move up, it’s the last down candle. Traders mark its high and low as a zone and watch what price does if it comes back.
Why it’s called an order block
The idea behind the name is about big orders. A large trader can’t buy everything at once without pushing the price up. So, the idea goes, they buy in pieces, and the last piece shows up as one final down One bar on a price chart. It shows where price opened and closed, and the highest and lowest it reached, in one stretch of time.More in the glossary before price takes off. That candle is the “block” of orders.
No chart can prove who traded or why. The name describes a shape on the chart, not a fact about who was buying. You don’t have to believe the story to mark the shape.
How to identify an order block, step by step
1. Find a strong move
Look for a fast move up of one or more big candles. Traders call this A strong, fast move in one direction, often one big candle.More in the glossary.
2. Look back one candle at a time
Step back from the start of the move until you reach the first red candle. That is the last down candle before the move.
3. Mark its high and low
Put a line at the top of its upper wick and the bottom of its lower wick.
4. Shade the zone
The band between the two lines is the order block. Many traders stretch it to the right until price comes back.
Many traders add one more check: the move away has to break a recent high (a A candle closing past the latest swing high in an uptrend, or past the latest swing low in a downtrend.More in the glossary), or leave a A price range that a fast move skips over, found with three candles in a row whose first and third wicks don’t overlap.More in the glossary. Others don’t. There’s no single rule.
Bullish and bearish order blocks
Bullish order block. The last down candle before a strong move up. Traders who use it watch the zone from above, in case price drops back into it.
Bearish order block. The last up candle before a strong move down. Traders who use it watch the zone from below, in case price rises back into it.
What counts, and what doesn’t
It’s the last one. If several down candles come before the move, the order block is the one right before it. The ones further back don’t count.
It needs a strong move. A down candle followed by a slow drift isn’t an order block. How strong is strong enough is your call. Some traders want the move to be bigger than a size they choose.
Wick to wick, or body only. Many traders mark the whole candle, from the top wick to the bottom wick. Others mark only the body, or from the open to the low. Each gives a different zone.
Halfway point. Some traders mark the middle of the block. ICT traders call it the mean threshold.
Timeframe matters. A block on a 5-minute chart may not be a block on a 1-hour chart. The How much time each candle covers, such as 1 minute or 1 hour.More in the glossary you mark it on is part of the rule.
Some of these choices can be set in your own indicator, such as wick to wick or body only. More on that below.
Order blocks and supply and demand zones
A A price zone marked where price paused before a strong move away. Demand zones sit below price, supply zones above it.More in the glossary is the same idea with a wider brush. Instead of one candle, traders mark the small candles where price paused (the base) before a strong move away.
Demand zones sit below price. They’re named by the moves either side of the base: drop, base, rally (DBR) or rally, base, rally (RBR).
Supply zones sit above price: rally, base, drop (RBD) or drop, base, drop (DBD).
Order block, base and supply or demand zone all mark where price paused before a strong move. They differ in which candles are marked and how the move away is measured. Read about supply and demand zones.
What can happen when price comes back
Many traders keep a block marked until price returns to it. A few things can happen:
Held. Price comes back into the zone and turns away from it. ICT traders often say the block was mitigated, or respected.
Closed through. A candle closes on the far side of the zone. Many traders then stop using it. Some flip it and watch it from the other side, and call it a breaker block. Read about breaker blocks.
Never reached. Price moves on and doesn’t come back. Some traders remove a block after a number of candles they choose.
Some traders also count how many times price has come back, and stop using a block after the first visit. An order block can’t tell you which of these will happen.
ICT order blocks: where the term comes from
The name order block was made popular by Inner Circle Trader, a trading educator whose names for chart patterns, like fair value gap, are now widely used.More in the glossary (Inner Circle Trader), and it’s now a core part of what traders call smart money concepts. Supply and demand zones are an older name for a close cousin. Both can be marked the same way on any candle chart, in futures, forex, crypto or stocks.
Often confused with
Fair value gap. The space three candles leave in a fast move. It often forms in the move right after an order block, so the two are drawn side by side. Read about fair value gaps.
Breaker block. An order block that price has closed through, now watched from the other side.
Mitigation block. Similar to a breaker, but it forms after price fails to make a new high or low first. Read about mitigation blocks.
Support and resistance. A price level where price has turned before, often more than once. An order block comes from one candle before one move. Read about support and resistance.
Order block indicator for TradingView
Have every order block marked for you, to your own rules
Finding the last down candle before every strong move takes time, and it’s easy to mark the wrong one. Instead, tell Wildflower’s Indicator what you want in plain words, like “when a candle closes above the latest swing high, mark the last down candle before it, wick to wick, and mark price coming back into it”. You type how many candles either side make a swing, whether the zone is the whole candle or the body, and how long to remember it. It reads a strong move as a close past the latest swing, not as a move bigger than a size you set. No coding needed. It marks every block on a chart so you can check it matches your rules. Then it gives you a script to add to TradingView, with a step-by-step guide.
Try it free. You only pay when you add it to TradingView.
Common questions
What is an order block in trading?
The last candle that moved the other way before a strong move. Traders mark its high and low as a zone.
What is a bullish order block?
The last down candle before a strong move up.
What is a bearish order block?
The last up candle before a strong move down.
Do you mark an order block with the wicks or the body?
Either. Many traders use wick to wick. Others use only the body. Each gives a different zone, and there’s no single rule.
What’s the difference between an order block and a supply and demand zone?
An order block is one candle. A supply or demand zone marks the base, which can be several small candles. The idea is the same.
What’s the difference between an order block and a fair value gap?
An order block is the last opposite candle before a move. A fair value gap is the space three candles leave during the move.
What is a breaker block?
An order block that price has closed through, now watched from the other side.
What does mitigated mean?
ICT traders say a block is mitigated when price comes back into it.
Which timeframe is best for order blocks?
There’s no best one. Blocks form on every timeframe. The one you watch is your choice.
Can I get an order block indicator for TradingView?
Yes. Describe your rules in plain words and Wildflower builds the indicator. Preview it free on a chart, then pay only when you add it to TradingView. See the Indicator.