I just realized that order blocks are a pretty "sleeping" analysis tool for many traders, even though they are extremely effective in practice.

In fact, order blocks are just a different way of looking at supply and demand zones. But instead of focusing on broad price areas, they concentrate on specific candles — precisely the last candle before a strong price move. The clever part is that you get very clean entry points for reversal or trend continuation trades.

There are two types of order blocks I often encounter. Bullish OB is a bearish candle near support, just before a strong upward move — this is a very strong buy signal in an uptrend. Conversely, bearish OB is a bullish candle near resistance, before a deep price drop — this is a great sell setup in a downtrend. The candle immediately after the order block is usually an engulfing candle, and that’s the signal to enter the trade.

But an important thing many people overlook is that you can't just see an order block and immediately enter. You need to understand market structure and Dow Theory to know when an order block is reliable and when it’s just a "trap." If the price is in a strong uptrend, a bullish order block near support will have a high win rate. But if the market is consolidating or the trend is unclear, the effectiveness of order blocks diminishes.

My setup method is also quite simple: identify the order block, place an entry at the determined level, set a stop loss below support (for bullish OB), and take profit at the nearest resistance. Then wait for the price to return to the order block to enter.

In summary, order blocks are one of the most powerful tools for technical analysis if you know how to use them correctly. They work well with supply/demand and market structure. You might find it more useful than you think.