The ICT Bullish Order Block (OB) is one of the foundational concepts in ICT Style technical analysis. It highlights areas where buy orders concentrate, triggering strong upward price movements.
Traders can identify these zones and seize trading opportunities when the price revisits them.
What is an ICT Bullish Order Block?
A Bullish Order Block is a zone on the chart with substantial buying pressure, usually marking the starting point of a strong bullish surge.
An ICT Bullish OB typically consists of a bearish candle followed by a strong bullish engulfing candle.
The engulfing pattern forms over two or more candles. The example below shows this pattern formed over three candles.
How to Identify a Bullish Order Block?
A Bullish Order Block (OB+) is the last bearish candle before a bullish move, usually consisting of two candles (first bearish, second bullish).
To identify valid Bullish OBs, consider the following:
- The bullish candle must Sweep the liquidity below the previous bearish candle
- The bullish candle must close above the high of the bearish candle
- Imbalances on lower timeframes validate the OB
- Market Structure Shifts (MSS) on lower timeframes indicate OB’s strength
In summary, the second candle must fully engulf the first candle (body and shadow).
How to Trade a Bullish Order Block?
To trade based with this strategy, follow these steps:
- Identify the market’s Order Flow or dominant trend
- Confirm the validity of the Bullish OB
- Wait for the price to revisit the OB
- Use confirmation signals like Market Structure Shifts (MSS) on lower timeframes
- Enter at around 50% of the OB zone for optimal risk-to-reward ratio
In the example above, the market shifts structure towards buying, indicating bullish momentum.
After forming a Bullish OB, the price retraces to the OB, allowing for a long position upon confirmation in lower timeframes.
Stop Loss and Take Profit in Bullish OB Trading
When trading based on a Bullish OB:
- Place the stop loss a few pips below the OB zone
- Use the next liquidity zones to determine your Exit point
Using Bullish OBs in Different Market Conditions
Bullish OBs are effective in trending markets and in ranging or neutral markets, where they can act as reversal points.
Precise market structure analysis and multiple timeframes are essential for identifying these zones under such conditions.
Conclusion
The ICT Bullish Order Block (OB) is a tool for pinpointing market entry points and aids in a deeper analysis of order flow and Smart Money Concepts (SMC).
By combining advanced market structures, trading volume, and multiple timeframes, traders can identify optimal entry zone.
