I just realized that many traders haven't fully understood what an order block is, even though it is an extremely useful tool in trading. Today, I want to share it in the simplest way possible.

What exactly is an order block? It is essentially a different way of viewing supply and demand zones on the chart. But instead of just looking at general price areas, an order block helps you identify very specific and effective entry points. The simplest way to visualize an order block is: it’s the last candle before a strong price movement.

Why is an order block important? Because it helps you find reversal entry (reversal entry) or continuation entry (continue entry) in the current trend efficiently. Moreover, order blocks also indicate price levels that significantly impact other traders’ psychology, which is very valuable when making trading decisions.

There are two types of order blocks you need to understand. The first is the Bullish Order Block (BuOB), which is a bearish candle that appears near the support level before a strong upward move. When you are in an uptrend, look for BuOB. The second is the Bearish Order Block (BeOB), which is a bullish candle near the resistance level before a strong downward move. It appears during a downtrend.

Identifying order blocks is also very simple. For Bullish OB, find the last bearish candle near support, then wait for a bullish engulfing candle to confirm. Place your entry in that order block zone, and set take profit and stop loss according to your strategy. Similarly, for Bearish OB, but in reverse.

However, keep in mind that not every order block should be traded. You need to understand market structure and Dow Theory to know when an order block is truly effective. That is the key to using order blocks wisely.

In summary, what is an order block? It is a strong supply or demand zone, an excellent entry point if used correctly. Buy when the price touches a Bullish OB in an uptrend, and sell when it touches a Bearish OB in a downtrend. This is just a reference for further learning, not investment advice. Always manage your risk and verify carefully before executing any trade.