{"term":{"slug":"order-block","term":"Order Block","definition":"The last opposite-direction candle before a significant price move, believed to represent institutional accumulation or distribution. Traders use order blocks as support/resistance zones where smart money is likely to defend price.","extendedExplanation":"Order blocks are another key concept from ICT methodology. A bullish order block is the last bearish candle before a strong upward move. A bearish order block is the last bullish candle before a strong downward move. The theory is that institutional traders placed large orders at these levels, and when price returns, those same institutions will defend the level.\n\nFor prop firm traders, order blocks serve as high-probability entry zones with clearly defined risk. You enter when price retraces to the order block and place your stop-loss below the order block low (for longs) or above the order block high (for shorts).\n\nOrder blocks are most effective on higher timeframes (1H, 4H, Daily) and when they coincide with other confluences like fair value gaps, liquidity sweeps, or key structural levels. Using order blocks in prop firm trading helps maintain disciplined entries rather than chasing price, which is crucial for staying within daily loss limits.","exampleWithNumbers":"NQ 1-hour chart: last bearish candle before a 200-point rally has a range of 18000-18050. This is the bullish order block. Price retraces from 18200 back to 18040 (within the order block). You enter long at 18040, stop at 17990 (below OB low), target 18200. Risk: 50 points * $20/point = $1,000 (1 contract). Reward: 160 points * $20 = $3,200. R:R = 1:3.2. On TopStep $100K with $2,000 daily loss limit, this trade risks 50% of your daily limit.","category":"strategy","relatedTerms":["fair-value-gap","market-structure","liquidity-sweep","stop-loss"]},"_links":{"self":"https://runvigil.app/api/glossary/order-block","page":"https://runvigil.app/learn/order-block","allTerms":"https://runvigil.app/api/glossary","learn":"https://runvigil.app/learn"}}