GLOSSARY · MARKET STRUCTURE
What is order block?
An order block is the candle or zone from which a strong directional move originated, treated as an area where institutional orders were placed and may remain.
What it means
The conventional identification is the last opposing candle before an impulsive move — the final down candle before a sharp rally, or the final up candle before a sharp decline. The reasoning is that a move of that size required substantial orders, and that the area where they were placed retains significance if price returns.
Why it matters
It is fair to say the concept is a repackaging of supply and demand zones with more specific rules for drawing them. The rules are the useful part: they make the zone identifiable by code rather than by eye, which is what allows the idea to be tested rather than merely believed.
What this changes in practice
Tested is exactly what happened. SMC-OB is one of only four strategies enabled in our shipping configuration, and it carried the trend regime almost single-handedly, producing +$179.64 in out-of-sample 2025 testing while everything else in that regime was noise. Several other smart-money strategies in the same family were cut — the full list records which and why.
Related terms
- Liquidity sweepA liquidity sweep is a fast move through an obvious high or low that triggers resting stop order…
- Fair value gapA fair value gap is a three-candle pattern where the middle candle moves so quickly that its nei…
- Break of structureA break of structure is price closing beyond the swing point that defined the current trend, con…
- Support and resistanceSupport and resistance are price areas where a market has repeatedly stopped and reversed, marki…
Educational information only, not financial advice. Trading leveraged products carries substantial risk of loss. Last updated 2026-08-11.