ICT Order Blocks — What They Are and How to Trade Them
What is an Order Block?
An order block (OB) is the last bullish candle before a bearish impulse move, or the last bearish candle before a bullish impulse move. It represents an area where institutional orders were placed — and where price is likely to return and react.
ICT (Inner Circle Trader) methodology treats order blocks as important support and resistance zones because they mark where significant institutional orders were placed.
Bullish vs Bearish Order Blocks
Bullish Order Block: The last down-close candle (red candle) before a significant bullish impulse. When price returns to this zone, it often acts as support.
Bearish Order Block: The last up-close candle (green candle) before a significant bearish impulse. When price returns to this zone, it often acts as resistance.
How to identify a valid Order Block
Not every candle before a move is an order block. The impulse that follows needs to be significant — at minimum, it should:
- Break a prior swing high or low
- Close above/below the preceding structure
- Move at least 2-3x the size of the order block candle itself
How to trade Order Blocks
Entry: When price retraces into the order block zone, look for a reaction — a rejection wick, a smaller timeframe break of structure, or a close back above/below the OB midpoint.
Stop: Beyond the far end of the order block. If it's a bullish OB, stop goes below the entire candle body.
Target: The previous swing high (bullish) or swing low (bearish). Aim for minimum 1:3 R:R on clean setups.
The most powerful setups
Order blocks are strongest when combined with:
- FVG confluence — an FVG stacked on top of an OB creates a "breaker block" zone
- Premium/discount — bullish OBs in discount, bearish OBs in premium
- Liquidity sweep — price sweeps a previous swing low, then returns into a bullish OB
Mitigation blocks
A mitigated order block is one that has already been tested once. Some traders still trade the second test; others move on. The first test of a fresh order block is always the highest probability.
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