Order Blocks (OBs)

An Order Block (OB) in Smart Money Concepts (SMC) is the last opposing candle—or cluster of candles—before a strong impulsive price move that breaks market structure. It represents the area where institutional participants placed significant buy or sell orders that initiated the impulse move. A Bullish Order Block is typically the last bearish (red) candle before a strong upward impulse that creates a Break of Structure; a Bearish Order Block is the last bullish (green) candle before a sharp downward move. Order blocks are considered high-probability support and resistance zones because institutional participants tend to defend these price levels when price returns to them. Traders look to enter positions when price retraces into an order block, in anticipation of the original institutional order being defended.