Imperial Research Order block
Order block: which candle is it?
An order block is the last opposite candle before a strong move that breaks structure. The idea: large orders were filled there, some are still waiting, and price often reacts when it comes back.
Checked 3 November 2026
Show the solution
Solution: B. B is the last bearish candle before the big bullish candle broke the old high. That is the definition of a bullish order block. Price came back into B's range and buyers stepped in again. A is an ordinary pullback with no break after it. C is the displacement itself, not the block.
Cancelled if a candle closes below the order block's low.
Illustrative diagram, not market data.
Three conditions
- Opposite candle. For a bullish block, the last down candle; for a bearish block, the last up candle.
- Displacement. The next move is fast and large, often leaving a fair value gap.
- Break of structure. The move closes beyond a swing high or low. No break, no block.
Trading the return
Wait for price to come back into the block. Aggressive traders place a limit order at the top of the block with a stop under its low. More careful traders wait for a reaction inside it on a lower timeframe, such as a sweep of a small low and a change of character, before entering. Either way, the stop sits beyond the block, and a close beyond it cancels the idea.
When the block fails
A bullish block that price closes through has failed. Do not average down. The broken block often turns into a breaker: resistance on the way back up. That flip is information, and the next setup may be in the other direction.
Questions
What is an order block in trading?
The last opposite candle before a displacement that breaks structure: the last down candle before a strong rally, or the last up candle before a strong drop. Traders treat its range as a zone where price may react again.
What is the difference between an order block and a breaker block?
An order block that fails becomes a breaker. If price closes through a bullish order block, that zone often turns into resistance; traders call it a breaker and look for shorts on the retest.
Do I use the body or the wicks?
Both are common. The full range from wick to wick is safer for the stop; the body is tighter for the entry. Pick one way and use it every time.
Are all down candles before a rally order blocks?
No. Without the displacement and the break of structure, it is just a candle. The break is what shows that real orders were behind the move.