ICT Decoded · Order Blocks
What Is an Order Block in ICT Trading?
By Steve H — reads every firm’s official rulebook, checks prices and codes daily, and maintains the Enigma Score · Methodology · Editorial policy · Last updated October 31, 2026
ICT concepts were created and are taught by Michael J. Huddleston, The Inner Circle Trader (X · YouTube). This lesson is FundedEnigma’s own summary, not affiliated with or endorsed by ICT.
In short: An ICT order block is the last opposite-close candle, or run of them, before the move that shifted structure: the last down-close candles before a rally, or the last up-close candles before a drop. Frame it with the bodies; its 50% is the mean threshold. It counts only after a sweep, a shift and displacement.
Order Blocks Explained: How to Find a Real ICT Order Block (Not Just a Candle) · 6:44 · published October 31, 2026 · part of the ICT Concepts Decoded playlist
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The full video is embedded above this article: Order Blocks Explained: How to Find a Real ICT Order Block (Not Just a Candle). This page is the written version, with every chart walked through step by step. Jump to any part of the video:
Key facts: order blocks at a glance
| Term | What it is | How it is used |
|---|---|---|
| Bullish order block | The last down-close candle(s) before price displaced higher | A zone price may come back down into |
| Bearish order block | The last up-close candle(s) before price displaced lower | A zone price may come back up into |
| Framing | Bodies: highest open or close to lowest; wicks for reference | The block's two edges |
| Mean threshold | The 50% of the bodies | Better blocks hold it; deep moves through it are a warning |
| Minimum size | A body zone of at least 2 ticks and 0.1 x the average candle range | Smaller is a line, not a block |
| What makes it count | Liquidity taken, structure shifted, displacement out of the block with a fair value gap | Without these it is just a candle |
| Against the higher timeframe | A block pointing the other way to the bigger trend | More likely a pause than a reversal |
| Retired | A body close beyond the far side | The block is done |
Last verified 2026-10-31. All charts below are real historical CME NQ futures data, shown in New York time.
Here is the idea on one chart. On August 21, 2026, NQ ran above the London high before the open, then turned, and the 09:30 fifteen-minute candle dropped about 150 points. The two up-close candles just before that drop mark the order block. When price came back up at 11:53, it stopped just inside the block, short of its middle, and turned lower again.
How does an order block work?
ICT frames an order block as a change in the state of delivery. Price was being delivered one way; when the move turns back through where that run of candles began, delivery flips, and the run's opening price is the level the market remembers.
- Consecutive candles of the same colour blend into one block. The reference is the opening of the run.
- Not every down candle is a bullish order block. The move after it is what makes it one.
Bullish order block vs bearish order block
A bullish order block is the last down-close candle, or run, before price displaced higher. A bearish order block is the last up-close candle, or run, before price displaced lower. Both work the same way, mirrored.
How do you mark an order block?
Frame it with the bodies, not the wicks: from the highest open or close in the run to the lowest. Then mark its 50%.
- Keep the wicks for reference only. The block's edges are the bodies.
- Keep a minimum size. A body zone under 2 ticks, or smaller than a tenth of the average candle range, is a line, not a block.
What is the mean threshold of an order block?
The mean threshold is the 50% of the block's bodies. The better blocks do not trade beyond it; price working deep through it is a warning.
How do you identify an order block that counts?
Three things, in order: liquidity was taken, structure shifted, and price displaced out of the block.
- Liquidity taken. Sell stops below a low for a bullish block, buy stops above a high for a bearish one. See liquidity.
- Structure shifted. After that sweep, price trades through the swing that stood before it. See the market structure shift.
- Displacement out of the block. The move away is at least twice the block's own height and leaves a fair value gap in the same direction.
Without those three it is just a candle. A block after a sweep of a key level, like the London high or the previous day's low, counts for more than one built on a minor swing. And a block that points against the higher-timeframe direction is more likely a pause than a reversal.
When is an order block invalid?
When a candle body closes beyond its far side: below the bottom of a bullish block, or above the top of a bearish one. Wicks into the block are normal.
- Fresh: price has not come back to it.
- Tested: price trades into its near edge.
- Mean threshold: price reaches the 50% and has worked through its middle.
- Retired: a body closes beyond the far side.
What do order blocks look like on real charts?
A bearish block that price barely re-entered and a bullish block that price worked deep into, both on the 15-minute chart.
Example 1: a bearish order block, NQ 15-minute, August 21, 2026
- At 05:39 price runs above the London high (29,467.50), and before the open it tops out at 29,539.00.
- The 08:15 and 08:30 candles both close up. Their bodies run from 29,487.50 to 29,528.25: that is the block, with its mean threshold at 29,507.875.
- At 09:17 price trades through the 07:00 swing low (29,452.75): the shift. The 09:30 candle drops about 150 points and leaves a fair value gap; the move away is more than five times the block's height.
- By 10:21 price is down at 29,220.00. At 11:53 it comes back up into the block, to 29,488.75: barely inside, well short of the mean threshold.
- That candle closes lower, and through the 16:00 close no 15-minute body closes above the block. At 14:31 price is at 29,353.75.
Example 2: a bullish order block, NQ 15-minute, September 9, 2026
- At 05:54 price takes the previous day's low (29,424.75). At 08:16 it bottoms at 29,333.00.
- The last down-close candle before the turn is the 08:00 candle. Its body runs from 29,337.00 up to its open at 29,397.00; the mean threshold is 29,367.00.
- At 09:29 price trades above the 07:45 swing high (29,452.00). The move away is close to three times the block's height, with a fair value gap behind it, and at 10:05 price reaches 29,593.75.
- At 11:11 price is back in the block, and at 11:24 it dips to 29,358.00, past the mean threshold.
- No 15-minute body closes below 29,337.00, so the block is still standing. But price worked deep through its middle, and through the 16:00 close it stays below 29,484.00. The deep retrace was the warning.
How do you use order blocks in your own charting?
Use a block as a zone to watch only when the sweep, the shift and the displacement are all there, and judge it by the closes.
- Say which block. Name the timeframe, both body edges and the mean threshold.
- Say what it swept. A key level counts for more than a minor swing.
- Watch the depth. A return that holds short of the 50% is the stronger case; deep moves through it are a warning, and a body close beyond the far side ends it.
- Pair it with the fair value gap and the inversion fair value gap: the displacement out of a block usually leaves one.
More concepts in the series are on the ICT Concepts Decoded hub. If you trade futures with a prop firm, you can look up a firm's rules on the challenges page or set two firms side by side on the compare page.
Frequently asked questions
Do you mark an order block with bodies or wicks?
On this page, with bodies: from the highest open or close in the run to the lowest. The wicks stay on the chart for reference only.
Is every last down candle before a rally an order block?
No. It counts only after liquidity was taken, structure shifted and price displaced out of it, leaving a fair value gap.
What if there are several down-close candles in a row?
They blend into one block, framed from the highest body edge to the lowest.
Which timeframe should I use for order blocks?
The timeframe you are reading. The examples here use 15-minute blocks; say the timeframe whenever you name one.
Does price always come back to an order block?
No. Some blocks are never revisited, and some are only tested at the near edge before price moves on.
How do you trade an order block?
This page does not give trade signals. It shows how to recognise a block, frame it, check what makes it count and follow its life by the closes.
Sources
- Concept: order blocks and the mean threshold as taught by ICT (The Inner Circle Trader, Michael J. Huddleston), who originated these terms. The explanation, examples and charts on this page are our own.
- Data: every chart is real historical CME Nasdaq-100 E-mini (NQ) futures data, shown in New York time.
- Video: Order Blocks Explained: How to Find a Real ICT Order Block (Not Just a Candle), FundedEnigma.
Last verified: 2026-10-31. Written by Steve H.
Disclaimer: This page is for education only and is not financial advice. Trading futures involves substantial risk of loss. Past price behaviour does not guarantee future results.
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