Recently, many people have asked me about Order Blocks, and I think this is a particularly valuable trading technique to understand deeply.

Simply put, an Order Block is another form of supply and demand zone. It can help you identify two key opportunities: first, to find effective reversal entry points, and second, to locate price areas that can influence trading psychology.

The core concept is quite straightforward—OB is the last bearish or bullish candle before a strong price breakout, usually appearing near support or resistance levels. This definition may seem simple, but its practical significance is substantial.

There are two types of OBs. A Bullish Order Block is the last bearish candle near a support level, after which the price tends to rise. A Bearish Order Block is the last bullish candle near a resistance level, after which the price tends to fall. In an uptrend, we identify Bullish OBs; in a downtrend, we identify Bearish OBs.

Regarding Bullish Order Blocks, they are the last bearish candles before a sharp price increase. The subsequent strong bullish candles are often Bullish Engulfing patterns, at which point you can set entry points, stop-losses, and profit targets according to standard methods.

A Bearish Order Block is the last bullish candle before a sharp price decline. The following strong bearish candles are often Bearish Engulfing patterns, which also require proper risk management parameters.

When should you trade with Order Blocks, and when should you not? This depends on your comprehensive understanding of market structure. I recommend studying market structure and Dow Theory in depth so that you can truly grasp the essence of OB in trading.

To summarize: Order Blocks are extremely important and easy-to-understand tools. They are essentially strong supply and demand zones. In an uptrend, when the price touches a Bullish OB, we buy; in a downtrend, when the price touches a Bearish OB, we sell. Although this logic is simple, executing it requires judgment based on the overall market structure.

These are all technical analysis reference methods. Every trader should explore and optimize them according to their own situation. Remember, this is not investment advice; I am only sharing some trading ideas.