What Are Order Blocks?

An order block is the last opposing candle before a strong, impulsive move — a zone where some traders believe large orders were absorbed. A bullish order block is typically the last down-candle before a sharp rally; a bearish order block is the last up-candle before a sharp drop. The candle pattern itself cannot identify who traded there.

Why order blocks matter

See it on a real chart: Gold (XAUUSD) liquidation heatmap — the modeled clusters above and below the current price.

Traders use the origin of a strong move as a reference zone because price previously moved away from it with force. The candle does not prove that an institution accumulated there or that unseen orders remain to defend it.

What makes an order block valid

• It precedes a strong, impulsive move (ideally one that breaks structure).
• The move away may also leave a Fair Value Gap, which is a second observable pattern rather than proof of hidden orders.
• It is unmitigated — price has not yet returned to it. Record that state when testing fresh versus previously visited levels.
• Record higher-timeframe context as a separate backtest variable rather than assuming it raises the probability.

Trading order blocks with liquidity

Some traders compare a swept cluster, an order block, and a Fair Value Gap for added context. That confluence is still a hypothesis, not proof of hidden orders or a high-probability entry. Ampeld draws the modeled structures together so you can inspect and backtest the idea yourself.