What is Order block in technical analysis?

An **Order Block** in technical analysis is a price zone where significant buying or selling orders have been placed, often by institutional traders like banks or hedge funds. These zones typically precede strong price movements and are viewed as key levels of support or resistance. There are two main types of order blocks: - **Bullish Order Block**: Occurs when there is a consolidation or accumulation of buy orders, followed by a sharp price move upward. The zone where this accumulation occurred is considered a bullish order block, potentially acting as support if the price revisits it. - **Bearish Order Block**: Occurs when there is a consolidation or distribution of sell orders, followed by a sharp downward price movement. The area where the price initially dropped is considered a bearish order block and may act as resistance in future price action. Traders use order blocks to predict potential price reversals or continuations. These zones are often monitored because they represent where large market participants have previously made their moves. If the price revisits an order block, traders expect a similar reaction to the previous move, either a reversal or a continuation of the trend. Identifying these areas can help traders make informed decisions on entries, exits, and stop-loss placements in their strategies.