Order block

What it means

In the literature this term comes from, an order block is where a large participant accumulated a position before moving the market, and the band is expected to matter later because unfilled business remains there.

Every part of that except the band is a claim about ORDER FLOW: who transacted, in what size, and what they left undone. Confirming it requires trade-level or order-book data, which this publication does not license. So the claim is not made here.

What is left is measurable and much smaller: the last bar before the break that closed in the opposite direction to it. That bar's high-to-low range is the band. Calling that an order block is a naming convention, and this page exists mostly to say so.

How we detect it

A block is only ever computed where a break of structure was found, and it is reported beside that break rather than on its own. A band with no break in front of it has no reason to exist under this definition.

From the breaking bar, the engine steps backwards up to ten bars for the first one that closed against the direction of the break — a down-closing bar before an upward break, an up-closing bar before a downward one. The ten-bar bound is what makes the word BEFORE mean something: a bar forty back is not the origin of a move, it is just the last time the chart went the other way.

The band is that bar's full range, high to low. The read also carries whether any bar since the break has traded back into it, which is reported either way rather than used as a filter.

When the read carries information

• The move away from the bar was a contiguous leg rather than a slow drift, which is the condition the ten-bar bound approximates.
• The frame is high enough that one bar covers a meaningful stretch of price. On a 15-minute chart a single bar's range is often narrower than the spread of a zone.
• It is read as a band the chart has a reason to be described against, in the same breath as the break it belongs to — never on its own.

When it misleads

• The whole premise. There is no way to tell from bars whether anything was accumulated at that bar, and a bar that merely closed the other way carries no evidence that anyone did anything in particular.
• In choppy conditions the last opposing bar is a few minutes old and arbitrary; almost every bar has an opposing neighbour nearby.
• One bar's range is not a zone in this taxonomy's sense — it has been touched once, not twice — so it is a weaker object than the support and resistance bands drawn elsewhere on the same chart.

How it reaches you

Our answers describe this as the last bar leaning against the break, give its band, and say whether price has been back into it. That is all it is, and the sentence beside it says the whole family is approximated from bars.

Nothing here is a prompt to act, and this publication does not treat such a band as a place where anything is expected to happen.