I just realized that an Order Block is a concept that many new traders overlook, but it’s extremely important for improving trading skills. Simply put, what an OB actually is are special price zones that help you find a good entry point for reversal or continuation trades.

My understanding is this: An Order Block is the last candle before the price makes a strong move. It can be a bearish candle near Support before the price rises, or a bullish candle near Resistance before the price falls. The cool part is that you can identify it quite easily, and it helps you find price zones that have a major impact on other traders’ psychology.

There are two basic types you need to know: a Bullish OB is the last bearish candle near Support, and then price rises strongly with a Bullish Engulfing candle. A Bearish OB is the opposite—it’s the last bullish candle near Resistance, and then the price falls sharply with a Bearish Engulfing candle. When trading, you place your Entry at the OB, then calculate Stop Loss and Take Profit based on that structure.

But what’s important is that you need to understand the market structure clearly first. I learned from Dow Theory and market structure, and it helps me know when I should trade OB and when I shouldn’t. Not every OB produces good results—you need to combine it with the bigger picture.

In short, what is an OB and why it’s important is because it’s a very strong Supply and Demand zone. When the price reaches a Bullish OB in an uptrend, I buy. When the price reaches a Bearish OB in a downtrend, I sell. It’s simple, but extremely effective if you know how to use it correctly. This is just my personal experience to share, not investment advice—please learn more and evaluate it for yourself.