6. Order Blocks (OB): Footprints of Institutional Accumulation
Part of Chapter 06: Market Structure & Smart Money Price Action
- The last down-candle before a violent impulse move that causes a BOS
- Mitigation mechanics: Institutions returning to mitigate their own drawdown
- High-probability Order Block validation criteria
An Order Block is the specific candle where institutional market makers accumulated or distributed massive volume right before an aggressive displacement move.
A Bullish Order Block is the last bearish (down) candle before an aggressive upward impulse that creates an FVG and breaks market structure (BOS).
When institutions engineered that initial buying wave, their own short hedge positions were temporarily trapped at the lows. When price pulls back to the Order Block, institutions close out those break-even positions and add aggressive longs, causing price to violently bounce.
An Order Block is only valid if it resulted in an energetic Break of Structure (BOS) and left behind an unmitigated Fair Value Gap. If price just slowly drifted away without momentum, it is not a valid Order Block.
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All Lessons in Chapter 06
Market Structure & Smart Money Price Action (10 Lessons)