1. The Two Main Types of Order Blocks
🟢 Bullish Order Block (Demand)
What it is: The last bearish (red) candle before a strong, impulsive upward move that breaks market structure.
The Logic: Institutions sold briefly to gather liquidity (stop losses) before buying heavily. When price eventually returns to this red candle, they defend their position, leading to a bounce.
Action: Look for buys (Longs) on the retest.
🔴 Bearish Order Block (Supply)
What it is: The last bullish (green) candle before a violent downward move.
The Logic: Institutions pushed price up to trap retail buyers, then sold heavily.
When price rallies back to this green candle, they sell again to mitigate losses or add to positions.
Action: Look for sells (Shorts) on the retest.
⚠️ The "Breaker Block" (The Bonus Type)
Sometimes, an Order Block fails. But don't delete it yet!
What it is: If a Bullish OB is smashed through by sellers, it often flips into a Bearish Breaker.
How to trade it: Old Demand becomes New Supply. When price comes back up to the broken block, it often acts as resistance.
🚀 Why Are Order Blocks So Important?
High Probability: You aren't guessing; you are trading specific areas where big money has previously shown interest.
Sniper Entries: OBs allow you to place pending orders (Limits) right at the source of the move, often resulting in trades with very little drawdown (price going against you).
Better Risk/Reward: Because you know exactly where the move started, you can place tight Stop Losses just outside the block.
💡 Pro Tip:
Not every candle is an Order Block. For an OB to be valid, the move away from it must be strong (leaving an imbalance/FVG) and it must break market structure (BOS).
Which type of Order Block do you find easier to spot? The Bullish or the Bearish? 👇
#Trading101 #SmartMoneyConcepts #BinanceSquare #CryptoEducation #PriceAction
