Been studying order blocks pretty deeply lately, and I gotta say this is one of those strategies that actually holds up when you test it properly on the charts.

So here's the core idea: a bullish order block is basically that final down candle right before price makes an impulsive move up and breaks through the recent structure. Same logic applies to bearish order blocks, just in reverse. These are essentially supply and demand zones where institutions have stacked their orders. Price tends to gravitate back toward these levels to rebalance liquidity and create new order placements.

The key thing I've noticed is that newer, untested order blocks work way better than ones price has already mitigated through multiple times. Makes sense when you think about it. If price has already come through and filled that zone, the institutional orders are already executed. You want to find fresh bullish order block setups where the imbalance is still there.

Here's something practical: when price fills about 50% of an order block, you can actually classify that OB as mitigated and completed. After that point, there's no real reason to keep watching that area. It's already done its job.

On the entry side, you're looking at the top of the order block as your entry, with your stop loss sitting at or just below the low of that block. Some traders add a few pips of buffer if they want to account for wicks or minor spikes. The timeframe matters too. A 4-hour bullish order block that moved price $5000 is going to be more reliable than a 15-minute one that only moved $500. Higher timeframes just carry more significance.

One refinement technique I use: if you've got what looks like an order block, but the following candle doesn't fully engulf it, you can refine it down to that specific candle instead of going back to the last major move. Keeps your levels cleaner and more precise.

The whole concept comes down to understanding market structure. If you're in bullish structure, you're hunting for longs at demand zones and bullish order blocks. Bearish structure? You're looking at supply zones and bearish setups. Don't fight what the market is showing you.

This approach has been working consistently for me in live trading, and it's definitely worth spending time to master if you're serious about technical analysis.