Order blocks and breaker blocks explained, with examples
Order blocks are where big players are thought to have placed large orders before a strong move. Breaker blocks are order blocks that failed, and they can be even more useful. Here's how to find both, and how to avoid the most common mistake: marking every candle as an order block.
What is an order block?
An order block is the last opposite-colour candle before a strong move that breaks structure:
- Bullish order block: the last down candle before a sharp rally that breaks the previous high.
- Bearish order block: the last up candle before a sharp drop that breaks the previous low.
The idea is that large orders were placed in that candle, and some were left unfilled. When price returns, those orders can push it away again.
What makes an order block valid?
Not every down candle before an up move counts. Check three things:
- Displacement: the move away from the block was strong and fast, ideally leaving a fair value gap.
- Break of structure: the move broke the last swing. No break, no order block.
- Untested: price hasn't been back to it yet. The first return is the one that counts.
How to trade an order block retest
- Entry: a limit order at the block's open or its 50% level.
- Stop: beyond the far side of the block.
- Target: the high (or low) of the impulse that left the block, then beyond.
- Skip it if the move away didn't break structure, or the block has already been tapped.
What is a breaker block?
A breaker is an order block that failed. Price sweeps liquidity, then smashes straight through the block instead of bouncing. When price comes back to that block from the other side, the old support often becomes resistance (or the other way round).
How to trade a breaker
- Entry: on the retest of the failed block.
- Stop: beyond the sweep that came before the break.
- Target: the next pool of opposing liquidity.
- Skip it if the break through the block was slow and overlapping rather than impulsive.
Order block vs breaker: which is better?
A breaker needs more to happen (a sweep, a failed block, a break and a retest), so it appears less often, but when it does, the story behind it is clearer. Many traders find breakers have the better win rate and order blocks the more frequent opportunities. Your journal is the only way to find out which is true for you.
Order blocks or breakers: which pays you?
Both are setup cards in The Trader’s Ledger. Log each trade under the right one, and your Performance tab shows which actually makes you money. £19, one payment.
Get The Trader’s LedgerOn MetaTrader, TTL Smart Money Pro marks order block retests and breaker blocks by name on MT4 and MT5.
Frequently asked questions
What is an order block in forex?
The last opposite-colour candle before a strong move that breaks structure. Traders expect price to react when it returns to that candle.
What is the difference between an order block and a breaker block?
An order block is expected to hold. A breaker is an order block that failed: price broke through it, and the retest from the other side is traded instead.
Do order blocks work on gold?
They can. Gold respects order blocks well around the London and New York sessions, but it moves fast, so allow a slightly wider stop beyond the block.
How many times can an order block be used?
Usually only the first return is traded. Once tapped, a block is considered spent.
Educational content only, not financial advice. Trading carries a high level of risk and you can lose more than you expect. Examples use illustrative prices.