Order block
In Smart Money Concepts, a chart zone often drawn around the last opposing candle before a strong price move. Some practitioners associate it with institutional activity, but candle data alone cannot identify who traded there or prove that orders remain.
Example. A bearish candle spans 1.0980–1.1000 before an upward move. A rule using the entire candle marks that interval; a body-only rule produces a different zone. Choose the rule before examining whether a later return worked.
Make the label reproducible
Define the qualifying move, zone boundaries, invalidation and maximum waiting time. Specify whether a zone can be reused after a touch. Different definitions should not be silently mixed in one backtest.
Common mistake
Do not present inferred institutional intention as an observed fact. A strong move after a candle does not establish that a bank accumulated a position there or that price must respond on a revisit.
Apply it
Treat the zone as one possible way to describe price action. Compare a fully specified rule against a simple baseline on out-of-sample data, including losing trades and execution costs.
FAQ
Does an order block prove a bank’s position?
No. It is a price-zone label rather than identification of a participant or its orders.
Can it be identified before the required strong move?
A rule requiring the subsequent impulse recognises it only once that condition is met. It cannot use that information earlier.
