Lesson 3 — Order Block Foundations
Learn the foundation of order blocks and how to avoid weak or forced order block analysis.
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Login to Track ProgressAn order block is a price area where meaningful orders may have been placed before strong displacement. In Smart Money analysis, order blocks are used as possible institutional decision zones. However, the concept is often oversimplified.
A common definition says an order block is the last opposite candle before a strong move. This can be a starting point, but it is not enough. A valid order block should be supported by structure, displacement, liquidity, imbalance, and location.
This lesson teaches students how to identify possible order blocks while avoiding the mistake of marking every candle. A professional trader treats an order block as a hypothesis. Price may respect it, mitigate it, partially react, or invalidate it.
The goal is to understand order blocks as structured risk zones, not magic entry points.