The last opposing candle before a strong price move, marking where institutional orders were placed.
An order block is the last bearish candle before a strong bullish move (bullish order block) or the last bullish candle before a strong bearish move (bearish order block). It represents the area where institutional traders accumulated their positions before driving price in their intended direction. When price returns to this zone, institutions often defend it.
Order blocks are institutional footprints on the chart. They act as high-probability support and resistance zones. When price revisits an order block, the institutions that created it often have pending orders there to add to their positions, causing price to react.
Before a large bullish rally from $200 to $220, the last red candle had a range of $198–$200. This is the bullish order block. When price later pulls back to the $198–$200 zone, it bounces — institutions are defending their positions.
A bullish order block: the last bearish (red) candle before a strong upward move. Institutions accumulated positions here.