ICT / SMC9 min read · May 19, 2025

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 high-probability support and resistance zones because they mark where "smart money" entered the market.


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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