An order block is the last opposing candle before a displacement move. How to identify a valid one, what it actually represents, and where the concept came from.
An order block is the last opposing candle before a strong directional move — the last down candle before a sharp rally, or the last up candle before a sharp decline. The theory is that significant orders were positioned there before the move began, and that price returning to the area may find those participants again.
Be precise about the claim. You cannot see order flow in a candle. What you can see is the last point of hesitation before an impulsive move, which is a reasonable place to expect a reaction if the move was genuine. That is a defensible reading. Claiming to know which institution positioned there is not.
This is repackaged supply and demand, taught by Sam Seiden and others well before the current terminology existed, and traceable further back to Wyckoff-era accumulation and distribution. That does not make it wrong — supply and demand zones are a legitimate framework — but it does mean nobody discovered anything secret.
Displacement out of it. An order block followed by an unconvincing move is just a candle. The block must precede a break of structure with genuine displacement, and it is stronger when it overlaps a Fair Value Gap, since two independent reasons for a reaction are better than one.
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