Order blocks explained
An order block is the last opposite candle before a strong move that breaks market structure. It marks where large orders were placed, and price often returns to that area before continuing, which is why traders watch it as a potential entry zone.
How an order block forms
Before a big move, institutions build a position. On the chart this shows up as a small candle (or cluster) in the opposite direction, followed by a sharp, high-momentum move that breaks a recent high or low. That last opposite candle is the order block: the footprint left behind by the large order.
What makes an order block valid
Not every candle before a move is a real order block. A stronger one usually has:
- A clear break of structure after it, confirmed on candle close.
- A fast, one-directional displacement leg away from it.
- Often an unfilled fair value gap inside the move.
- The block still fresh, meaning price has not already traded back through it.
Our chart applies these checks automatically and only draws blocks that pass, so you are not guessing.
Fresh, tested and mitigated
An order block has a lifecycle. When it is new it is fresh. When price taps it and reacts it becomes tested. When price closes through it, it is mitigated and no longer valid. The chart tracks this and drops blocks once they are invalidated on close.
Using them without guessing
Order blocks work best with context: the trend, nearby supply and demand zones, and support and resistance. Open the live XAUUSD chart, turn on order blocks, and watch how price behaves when it returns to a fresh one.
FAQ
What is the difference between an order block and supply/demand?
An order block is a specific candle tied to a break of structure. A supply or demand zone is a broader area of imbalance. They often overlap.
Do order blocks repaint?
On our chart they are confirmed on candle close and removed only when invalidated on close, so they do not repaint.
Ready to see it live? Open the free XAUUSD live chart and try these ideas on real price.