What it means
Bullish OB: last down-close candle before a move up. The SMC checklist: it took liquidity, the move left an FVG, it broke structure, and it is still unmitigated.
In practice
An order block marks where a decisive move began. The thinking is that large orders were being worked in that candle, and that some remain unfilled, so price reacts when it returns.
Traders mark the block and plan an entry on the first return, with the stop beyond the far side of the candle. The checklist keeps the choice honest: liquidity taken, a gap left behind, structure broken and no visit since.
What to watch for
Any last down candle before a rally can be called an order block, and most of them fail. Without displacement and a break of structure the label means nothing, and a block that has been revisited has lost most of its value.
Related terms
4 terms- Mean thresholdThe 50% level of an order block's body.
- Breaker blockAn order block that failed after a liquidity sweep and flipped: a broken bearish block becomes bullish support.
- Demand zoneThe base price left in a hurry before a strong rally (a supply zone is the base before a strong drop).
- Point of interestPOIAny zone you might trade from: a fair value gap, order block, breaker and so on.