I just saw many of you ask what an order block is and how to apply it to trading. This is truly an extremely useful concept that I want to share.

Basically, an order block is a different way of looking at supply/demand (supply/demand). It helps traders find nice entry points for reversal trades or trend continuation trades. Simply put, an order block is the last candle before the price makes a strong move near support or resistance levels.

There are two types of order blocks you need to know. First is the Bullish Order Block (BuOB) — it is a bearish candle that appears near support, just before the price starts to rise sharply. When you see it in an uptrend, that’s a signal to identify this zone. Second is the Bearish Order Block (BeOB) — a bullish candle near resistance before the price plunges. This shows up in a downtrend.

The identification isn’t too complicated either. For a Bullish OB, you look for the last bearish candle before the strong upward move, and the strong bullish candle right after it is often a Bullish Engulfing. For a Bearish OB, it’s the opposite — find the last bullish candle before the price plunges, and a Bearish Engulfing candle will follow.

As for entry, take profit, and stop loss — you place your entry in the order block zone, TP at the next resistance levels, and SL below ( with BuOB) or above ( with BeOB).

But this is the important point — you shouldn’t trade order blocks at any time. You need to understand the market structure first. Reading carefully about market structure and Lý thuyết Dow will help you know when order blocks are truly valid.

Overall, an order block is a strong supply/demand zone. The basic strategy is: buy when the price returns to a Bullish OB in an uptrend, sell when the price returns to a Bearish OB in a downtrend. This technique is easy to understand, but it’s extremely important if you want to improve your trading skills.

This is only reference information for you to learn more about a method for yourself. It’s not investment advice, but sharing experience from the trader community.