Order Blocks & Breaker Blocks: Where Smart Money Enters
Identify the last down-candle before an up move (and vice versa), validate order blocks, and use breaker blocks for reversals.
What An Order Block Is
An order block (OB) is the last opposing candle before a strong, impulsive move that breaks structure. It marks where institutional orders were likely filled.
Price frequently returns to the OB before continuing, giving you a precise entry location.
Bullish & Bearish Order Blocks
- Bullish OB — the last down candle before a strong rally that breaks a high. Used for buys.
- Bearish OB — the last up candle before a strong drop that breaks a low. Used for sells.
Validating An Order Block
Not every block is worth trading. Make it stronger when it:
- Causes a genuine BOS.
- Aligns with the higher-timeframe bias.
- Sits in a premium or discount area, not mid-range.
- Has an imbalance (FVG) left behind by the move.
Breaker Blocks
When an order block fails — price pushes through it — it can flip into a breaker block. It then acts as support or resistance in the opposite direction.
Breakers are excellent for catching reversals after liquidity has been swept and structure has shifted.
The Entry Model
A common Smart Money sequence:
- Sweep of liquidity (BSL/SSL).
- Shift in structure (CHoCH).
- Return into the order block or FVG.
- Entry with stop beyond the block and target at the next liquidity pool.
✅ Key Takeaways
- An OB is the last opposing candle before a structure break.
- Validate with BOS, HTF bias and premium/discount.
- Failed OBs flip into breaker blocks.
- Best entries combine sweep + CHoCH + OB/FVG.
⚠️ Common Mistakes
- Trading every block regardless of confluence.
- Ignoring where the OB sits in the range.
- Wrong stop placement relative to the block.
🧠 Quick Quiz
Lock in the lesson — answer, then check your score.
Keep The Momentum.
Finish the track, take the quizzes, and come back to these notes before your next session.