SMC Term — Zone
What is OB?
Order Block
OB — Order Block
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An Order Block (OB) is the last bearish candle before a strong bullish move (bullish OB) or the last bullish candle before a strong bearish move (bearish OB). It represents an area where institutional orders were placed. When price returns to an Order Block, institutions are expected to defend their positions, making it a strong support or resistance zone.
How to Trade OB
To trade an Order Block: first confirm the trend using higher timeframe BOS. Then identify the most recent OB in the direction of the trend. Wait for price to pull back into the OB zone. Look for a confirmation candle (bullish engulfing, rejection wick) inside the OB before entering. Stop loss goes just below the OB (for bullish) or above it (for bearish). The strongest OBs are those that caused a BOS or MSS.
Real Example — XAUUSD
Example: Price drops from 3320 to 3280 (bearish move), then rockets up to 3360 creating a BOS. The last bullish candle before that drop — the Bearish OB — sits at 3315–3320. When price returns to that zone, institutions may sell again. Enter short from 3318 with SL above 3322.
Related SMC Terms
Frequently Asked Questions
What is an Order Block in SMC trading?
An Order Block is the last opposite-direction candle before a strong impulsive move. A bullish OB is the last bearish candle before a strong bullish impulse. A bearish OB is the last bullish candle before a strong bearish drop. It marks where institutional orders were placed and acts as a high-probability support or resistance zone.
How is an Order Block different from a support level?
Traditional support is a horizontal price level where price has bounced multiple times. An Order Block is more specific — it is the exact candle body where institutional buying or selling occurred before a significant move. OBs are more precise entry zones and are combined with market structure analysis for higher probability setups.
What makes an Order Block invalid?
An Order Block becomes invalid when price breaks through it with a strong close rather than bouncing. If a bullish OB is broken to the downside with a decisive bearish candle, the OB is considered mitigated and may flip into a bearish Breaker Block instead.
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