What you will learn
- What an order block is and why price comes back to it
- How to identify an order block in 3 steps
- The 3 conditions of a strong order block: gap (FVG), break of structure and a liquidity sweep
- Entry at 50%, stop-loss outside the order block, target at 1:2
- 4 real trades on 1H charts: ETH long, ETH short, SOL long and a failed BTC short
- A 2-month backtest: why weak order blocks lose money and strong ones make it
What is an order block?
Big players cannot buy or sell their full position in one go without moving the price against themselves. So they fill their orders bit by bit inside one small zone. That zone is called an order block. When price moves away fast, some of their orders are still unfilled, which is why price often comes back to the same zone and reacts from it.
How to identify an order block in 3 steps
1. Find a strong, fast move on the chart. 2. Look at the last opposite candle right before that move. Before a strong move up, that is the last red candle. Before a strong move down, it is the last green candle. 3. Draw a box from that candle's high to its low. That box is your order block.
Strong vs weak order blocks
Not every order block works. A strong order block usually has these 3 conditions:
- **Gap (FVG):** the move away from the zone is so fast that it leaves a gap between candles.
- **Break of structure (BOS):** the move breaks a previous high (or low), which shows real strength.
- **Liquidity sweep (bonus):** price first swept the liquidity below a low (or above a high) and then created the order block.
An order block with none of these is weak, and weak order blocks often fail.
Entry, stop-loss and target
- **Entry:** at the 50% level of the order block.
- **Stop-loss:** just outside the order block.
- **Target:** 1:2 risk-to-reward.
Real trades from the video
We walk through 4 real trades on 1H charts: an Ethereum long, an Ethereum short and a Solana long that each hit the 1:2 target, and a Bitcoin short that hit its stop-loss by just a few dollars before price later reached the target. Losses are part of the game, which is why risk management matters.
What the backtest showed
Over 2 months of 1H data:
- Trading every order block: **−9R**
- Weak order blocks only: **−25R**
- Strong order blocks only: **+16R**
The lesson is simple: the order block itself is not the edge. Picking only the strong ones is.
Order block checklist
- Is there a strong move away from the zone?
- Did that move leave a gap (FVG)?
- Did it break structure (BOS)?
- Was liquidity swept before it?
- Entry at 50%, stop-loss outside the zone, target 1:2.
This lesson is for education only and is not financial advice.
This lesson is for education only and is not financial advice. Trading is risky and you can lose money. Every example uses past market data and does not predict future results.
