I've noticed that many traders overlook an important detail in technical analysis—the concept of order blocks. These are not just support and resistance levels but specific zones where major players (banks, institutions, market makers) have placed their main positions. When the price returns to these areas, something interesting usually happens.

The main idea is simple: an order block forms at reversal points or just before strong impulses. These are candles or groups of candles that precede a sharp price movement. For example, a bearish candle before an upward impulse is a potential bullish order block, a zone where large buyers accumulated positions. Conversely, a bullish candle before a decline can serve as a bearish order block.

What’s interesting is that there are three main types. The first type is the regular order block, the most basic. It’s a zone where the price often bounces when it returns. Trading volumes there are usually noticeable, and the level holds well. The second type is an engulfed order block. Here, the situation is different: the price breaks through this zone and continues moving further, ignoring it. This signals that the market structure has changed, and the opposite side (sellers or buyers) has taken control. After such an engulfing, the order block often changes its role—what was support becomes resistance, and vice versa.

The third type is a breaker block, the most interesting from a manipulation perspective. Here, the price initially breaks the zone in one direction (say, down), triggering retail traders’ stop-losses, then sharply reverses and moves in the opposite direction. The broken level becomes a new support. This is a classic technique used by big players—to hit stops, gather liquidity, and then move the price where they want.

Practically, it works like this: when you see an order block on the chart, it’s a potential low-risk entry point. The price often returns to this zone, where you can open a position with a stop beyond the block. You can also use order blocks to analyze market structure—they show where large players accumulated or distributed positions. This helps understand where the price might go next.

Signs that you’re looking at an order block: clear levels on the chart that the price often respects, consolidation before a strong impulse, and characteristic volume decrease as the price approaches this zone. When you see a retest of such a zone, it often results in either a bounce or a breakout with a reversal movement.

Honestly, understanding order blocks has significantly improved my trading. Instead of chasing random levels, I now look for zones where reversals occurred and impulses formed. On Gate.io, these zones are clearly visible on different timeframes. If you want to dive deeper into technical analysis, I recommend paying attention to this concept. It really works.