I just learned a pretty useful technique that I want to share with everyone — what is an order block and how to apply it in trading.

Actually, an order block is simply a different way of looking at supply and demand zones. It helps us identify high-quality entry points, especially when aiming to enter reversals or trend continuations.

The simplest definition is that an order block is the last candle before a strong price movement. It is located near support or resistance, and afterward, the price begins to rise or fall significantly. The concept is not complicated but extremely useful if used correctly.

There are two types of order blocks that you need to understand. Bullish Order Block (BuOB) is a bearish candle near support, before the price makes a strong upward move in an uptrend. Conversely, Bearish Order Block (BeOB) is a bullish candle near resistance, before the price drops sharply in a downtrend.

For a Bullish Order Block, the strong bullish candle immediately after it is often a Bullish Engulfing. At this point, you can set entry, take profit, and stop loss levels based on these points. Similarly, for a Bearish Order Block, the strong bearish candle afterward is a Bearish Engulfing, and you determine trading points in the same way.

But you shouldn't always trade based on order blocks. To understand when to enter and when to avoid, we need to understand the market structure clearly. That is the key factor to using order blocks effectively.

In summary, what an order block essentially is—a powerful supply/demand zone. When the price reaches a Bullish Order Block in an uptrend, it’s a buying opportunity. When the price reaches a Bearish Order Block in a downtrend, it’s a selling opportunity. This technique is very easy to understand but extremely powerful if applied correctly.

This is just a reference for everyone to have an additional analysis tool. Each trader should find a method that suits themselves. This is not investment advice, just sharing knowledge.