I just realized there is a pretty interesting concept in technical analysis that many new traders haven’t paid attention to—that is, Order Block. Actually, what an OB is isn’t complicated, but it’s extremely powerful when applied to real trading.

Basically, an Order Block is a different way to look at supply and demand zones. Instead of only watching where the price reacts, you’ll identify specific candles—the last candles before the price makes a strong move. That’s when market makers have finished absorbing the pressure and are about to start the move.

There are two types of order blocks you need to know. Bullish OB are bearish candles that appear near support, right before the price starts to rise strongly—usually a Bullish Engulfing. Bearish OB is the opposite: bullish candles near resistance before the price drops, followed by a Bearish Engulfing.

The benefit of understanding what OB is and how to identify it is that you’ll have two major opportunities. First, you can find a great entry point for a reversal trade—when the price reverses direction. Second, you can recognize price zones that have a strong impact on traders’ psychology, where buying and selling activity will concentrate.

When should you trade order blocks? This depends on market structure. In an uptrend, you wait for the price to pull back to a Bullish OB, then go long. In a downtrend, you wait for the price to reach a Bearish OB, then go short. But to understand more deeply, you need to be clear on market structure and Dow Theory.

In summary, Order Block is an extremely important and easy-to-understand tool. It represents the strongest supply and demand zones. When you know how to identify what an OB is and how it works, finding entry points becomes more scientific. This is a reference method to help you develop your trading skills—not investment advice, but a tool for you to build your own strategy.