A marked candle

Order blocks explained

You mark a candle, price comes back to it, and sometimes the market turns. Sometimes it trades through the box as if the box had never been there. After a few of each, the name starts to feel like either a secret or a decoration.

An order block is a trading concept, commonly represented by a marked candle or a small price area that price left behind during a strong move. Different methodologies define that area differently, and they draw it differently. What traders then add is an assumption: that important orders were placed there, and that some of them are still waiting. The marked prices can be seen. The waiting orders cannot.

The name

What traders mean by an order block

In the version most courses teach, a bullish order block is the last down candle before a strong rise. A bearish order block is the last up candle before a strong fall. Some drawings take only the body. Some take the whole candle, including the wick. Some take the few candles at the origin of the move rather than one of them. Two traders can use the same name and outline different prices.

The story attached to the drawing is usually the same. Large participants are said to have dealt in that candle. The move away is read as their campaign beginning. The part of their order that was not filled is supposed to remain, so that a return to the candle will be defended and price will leave again in the original direction.

That is a coherent story. It explains why the candle is marked, and why a return to it is watched. It is not something a candle chart can confirm. The chart shows where price traded. It does not show whose orders were placed, how much of them remained, or whether anyone intended to defend the area later.

The origin

Why that candle attracts attention

A sharp move makes its origin look significant. Price has been quiet, then one opposing candle appears, and then the market leaves quickly. The eye goes back to the last candle that pointed the other way, because that candle is the easiest place to say the move began here.

Picture a market that has been sitting in a narrow patch. A down candle prints. The following candles rise quickly and do not come back. The down candle is an obvious candidate for a bullish order block: it is the last fall before the rise, and the rise was strong enough to feel intentional. The bearish case is the same shape inverted. An up candle, then a fast decline, and the up candle is marked as the origin.

The attention is reasonable. A strong departure is information. Price found trade elsewhere, and for a while it did not need the prices it left. Marking the origin keeps that departure attached to a place, which is more useful than remembering only that the market went up. The extra step, from price leaving here to unfilled institutional orders remaining here, is the step the chart does not take. The same fast leave is sometimes boxed as the space between the candles rather than as the candle it left. Fair value gaps explained looks at what that space records.

The departure

What a sharp departure does not prove

The departure proves that price moved, and that the move was large enough to notice. It can support a reading that the market had stopped accepting the old prices. In the Market Maker Method, a period of quiet holding can be read as Accumulation, and the later travel as Distribution, also called Profit Release. Those are readings of the behaviour. They do not identify a firm, and they do not store that firm's remaining size inside the last opposing candle.

An order block is often drawn at the moment of departure and then treated as a fact about the future. The candle stays on the chart, so the drawing looks permanent. The orders, if they existed, were a feature of that moment. Nothing in the old print updates them. A sharp leave is a poor kind of evidence that size is still resting at the leave: the visible event is that trade moved away.

Then and later

A past reaction is not a future one

The rectangle is a record. It says that during this candle, price traded between here and here, and that a move followed. Traders sometimes had a reaction at those prices. That reaction is historical. It belongs to the session in which it happened.

A later return is a new event. The same prices are available again, with different participants, a different position in the day, and a different path into the area. The old candle cannot oblige the new one. It can only remind you where the earlier move began, so that you have a place to watch. This is why an order block can be a useful reference without being a promise. A reference gives the return somewhere to be judged. A promise says the judgement in advance.

A return

When price returns and reacts

Take the down candle that preceded the rise. Later, price comes back into it. The return slows. Candles overlap inside the marked area, or they probe it and leave upward again. The old high of that candle is not casually given up, and the move that follows resumes the direction of the original departure.

What you can see is a return to a prior origin, and a failure to accept prices through it. That is worth noticing. Other traders can see the same origin, so the area is no longer private. A reaction there may be people responding to a place that has become obvious, rather than the original orders waking up. You do not need to decide which. You can watch whether the return is rejected.

Liquidity grabs and breakouts asks the same question of a push through an obvious level: did price remain there, or did it come back? A return into a marked candle is another version of that question. Rejection supports keeping the area as a reference for the current move. It does not prove that an institution defended it, and it does not require you to buy or sell the reaction.

A break

When price goes straight through

Use the same candle and a different continuation. Price returns, trades through the body and the wick, and keeps going. Pullbacks now hold on the far side of the box. The origin of the old rise has been accepted as ordinary price in the other direction.

The rectangle is still on the chart. It has not been erased, and it has not been proved false as history. Price did leave from there. What failed was the assumption that the area would still reject a return. A reference that price accepts and leaves behind has done its job: it has shown you that the earlier story is no longer the one the market is trading. Both outcomes can happen to boxes that were drawn with equal care. A sequence of reactions does not make the next return safer. A sequence of failures does not make the next origin irrelevant. Each return is judged by what price does this time.

After the mark

The drawing and the behaviour after it

The useful information is rarely the rectangle. It is whether the return is being rejected or accepted, and whether that behaviour continues. A pause inside the candle can later become a push straight through. A push through can fail and come back, leaving the area intact after all. Acceptance and rejection are developing observations. There is no count of closes that settles them, and a later swing can revise the reading.

The Market Maker Method is a way of asking what kind of behaviour the return belongs to, if it belongs to one at all. A market that keeps returning to an area and failing to leave it can be read as holding, which is the accumulation question. A push into an obvious candle that cannot stay there can be read as a test. Travel away that keeps going can be read as the release. The order block is not a fourth phase, and drawing it does not tell you which of the three you are in. If later price stops agreeing with the reading, the reading gives way. The phases are questions to ask while the candles are forming, not a label that makes the box predictive.

Another language

A related question, under another name

Wyckoff teaching asks whether an area where price has dealt before still affects a later return. That is a related question, and it is not the same drawing as the last opposing candle commonly marked as an order block. Wyckoff and the Market Maker Method sets out how those readings differ. An earlier reaction is not, by itself, an instruction about the next one.

Either reading

On the chart

None of this needs an indicator. A candle chart is enough to mark where a move began, and then to watch whether a return is rejected, accepted, or still undecided.

PAT for TradingView is one way to keep the Market Maker Method in view while that return is developing. A Pressure Point marks a meaningful change in behaviour, and what matters is what price does afterwards. A Ray Line is a reference for which side is holding. Purple Dots draw attention to a moment worth watching. How those readings sit on a candle is set out in How PAT reads the market.