What Is an Order Block

The last red candle

An order block is the last candle of the opposite colour before a strong move. On 9 April 2025 the euro against the dollar closed a red day at 1.09458. The next two days rose 251 and 163 pips — a pip being the fourth decimal place, the smallest step most people count in. The 9 April candle is the last red one before that rise, and the order block is that candle, drawn as a band across its range from 1.09129 to 1.10948. The same shape before a fall — the last green candle — is a bearish order block.

Why it is called a block

The name comes from an idea about orders. Large buyers, the thinking goes, placed their orders during the last red day, while the price was still falling, and those orders are what pushed the next two days up. Nobody can see the orders themselves. What can be seen is the candle they would have sat in — the block — and the strong move after it, which is taken as the sign that they were there.

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