Most traders understand the concept of
Order Blocks, but they still lose because they
pick the wrong OB.
The chart has many OBs — but Smart Money only respects
specific ones.
This post will teach you
how to choose the correct Order Block, avoid fake OBs, and enter trades with
precision.
###
1. What is a Valid Order Block?
A valid Order Block is:
The last candle before a strong impulsive move that breaks structure.
Key phrase:
Breaks Structure (BOS)
If there is no BOS after a candle, it is
not a valid OB.
###
2. Types of Order Blocks
| Type | Used For | Example |
| ----------------------- | ------------ | ------------------------------------ |
|
Bullish Order Block | Buy entries | Last bearish candle before up move |
|
Bearish Order Block | Sell entries | Last bullish candle before down move |
Simple logic:
- For Buy → Use the last down candle
- For Sell → Use the last up candle
###
3. Only Use OB With Liquidity Sweep
This is the most important rule.
Smart Money creates OB only after collecting
liquidity.
So before selecting your OB, confirm this:
Code:
Was a previous high or low swept?
If yes → OB is strong.
If no → OB is weak or trap.
Liquidity sweep ensures:
- Trap traders get stopped
- Real trend begins
- Your entry becomes accurate
###
4. Use OB Only After BOS / CHOCH
Never enter on OB
before structure is broken.
You need confirmation that direction changed:
- CHOCH → Trend Reversal signal
- BOS → Trend Continuation signal
So the sequence is:
Code:
Liquidity Sweep → BOS/CHOCH → OB Entry
If BOS is missing → skip trade.
###
5. How to Refine the OB (Entry Optimization)
Use
M15 or M5 to find OB.
Then refine it on
