The order block concept focuses on the price level where institutional volume accumulated just before an aggressive, sustained breakout. Whether or not that's literally true for any single candle, the concept gives traders a specific, repeatable way to mark potential support and demand zones.
1. Identifying a valid order block
Look for the last bearish candle immediately before a strong, sustained bullish move (or the last bullish candle before a strong bearish move). The key qualifier is the strength of the subsequent move, a sharp, decisive departure suggests real conviction was behind it; a weak, choppy move away is a much less reliable block.
2. Why price often returns to test it
Similar to a broken resistance level flipping into support, price frequently retraces back to the order block zone before continuing in its original direction, treating it as the boundary institutional interest is expected to defend. This retest, not the initial departure, is often the actual entry many traders wait for.
3. Avoiding over-marking the chart
Marking every candle before every minor price wiggle as an order block produces a chart cluttered with low-quality zones that don't behave any differently than random support/resistance. Reserving the label for candles preceding genuinely strong, high-conviction moves keeps the concept useful rather than diluted.