# ICT Order Blocks Explained: How to Mark Them · DT Academy > What an ICT order block is, how to mark it and its mean threshold, valid vs invalid blocks, and how to test it in a backtester. [Back to ICT Concepts](https://www.thedtterminal.com/academy/courses/ict-concepts) Lesson 7Order blocks Chapters done # Order blocks Lesson 07 · 8 min read · By DT Terminal Mark a valid order block, from its open to its far wick, plus its mean threshold and its invalidation, and see how it differs from a supply or demand zone. Unlock the full lesson in the app Worked examples, the quiz and the interactive tools are in the app. Free account. [Continue in the app, free](https://www.thedtterminal.com/login?signup=true&redirect=%2Fjournal%2Facademy%2Fict-order-blocks) Chapter 1 of 6 ## The last opposite candle before displacement An **order block** (OB) is one candle, picked out by a rule. - **Bullish order block.** The last down-close candle before a displacement move up that breaks structure: a candle trades or closes through a prior swing high. - **Bearish order block.** The last up-close candle before a displacement move down that breaks a prior swing low. The story is that large traders left orders unfilled there, and price comes back to "mitigate" them. That is **a story, not a measured fact**. **A definition you can test.** Whether price respects a block on your market is a question **your own sample answers**. **Go deeper** It builds on the swings in [Market structure the ICT way](https://www.thedtterminal.com/academy/ict-market-structure), the sweeps in [Liquidity the ICT way](https://www.thedtterminal.com/academy/ict-liquidity) and the gaps in [Fair value gaps the ICT way](https://www.thedtterminal.com/academy/ict-fair-value-gaps). ICT's early Core Content described the bullish block as the lowest down-close candle near support, confirmed when a later candle trades through its high. The version above is the one most traders, and Smart Money Concepts, use today. The full story: large traders built positions there and left orders unfilled. **No peer-reviewed study** tests order blocks as ICT defines them. An order block is a candle that meets written conditions, nothing more. Chapter 2 of 6 ## Displacement makes the block **Displacement** is a fast, wide-range, one-directional move away from the candle. It is **what turns a candle into a block**. A **slow, overlapping drift** away leaves an ordinary pullback candle, however it looks. The common version needs displacement and a structure break caused by it. Most traders grade a block up when: - a fair value gap sits directly after it; - it formed just after a liquidity sweep; - it sits in discount for a bullish block, or premium for a bearish one ([Dealing ranges, premium, discount and OTE](https://www.thedtterminal.com/academy/ict-dealing-ranges-and-ote)). These are **grades, not strict rules**. Write down which ones your rule needs. **Go deeper** A strong displacement usually leaves a fair value gap. Premium and discount are read inside the current range. In most published versions all three are grades, not requirements. Chapter 3 of 6 ## Marking it: open, wick and mean threshold The **proximal line** is the block's near edge, where price touches first on the way back. The **distal line** is the far edge, your invalidation side. Where you draw them is a choice: | Marking | Bullish block | Trade-off | | --- | --- | --- | | Body | Open to close | Tightest zone, more missed touches | | Full range | High to low | Wider zone, more touches, invalidation at the far wick | | Open to wick | Open to low (open to high for bearish) | **ICT's common marking**, and the one this lesson draws | The **mean threshold** is the block's 50% level. ICT measures it on the body, halfway between open and close: if the block is going to hold, later candles should not close beyond it. Some educators halve the full range instead. **Pick one and keep it**. **Go deeper** When several down-close candles sit together, merge them or take the one nearest the move. Write that rule down too, and **never switch from body to wick** halfway through a trade to justify holding it. Chapter 4 of 6 ## Valid, not valid, mitigated and refined Mark a block backward, from a displacement that has already printed, **never forward**. Then check it against these cases. Order blocks ### Bullish and bearish, valid against not valid - Bullish block - Bearish block - Fair value gap - The swing it breaks Bullish order block last down-close candle before a move up Bearish order block last up-close candle before a move down With displacement a gap left behind and a close through the swing No displacement just a pullback candle: not a block Already mitigated price has been back once; the next return ranks lower Refined the last down-close candle inside the wider area **Read down a column.** The same candle shape is a block only when a fast move leaves it and closes through the swing. The bearish column is the bullish one turned upside down. Schematic candles, not market data. Each box runs from the block's open to its far wick. - **No displacement.** No gap, no structure break: it is just a candle. - **Already mitigated.** Price has been back once. The first touch is usually ranked highest. - **Closed through.** A body close beyond the distal line ends the block. It may become a breaker, which is [the next lesson](https://www.thedtterminal.com/academy/ict-breaker-and-mitigation-blocks). - **Refined.** The last down-close candle on M15 inside an H4 block: a tighter zone and a smaller stop, but more missed fills. Mark blocks bar by bar in the backtester Replay London sessions on `EURUSD` M15 and mark each block as it forms. Replay hides the candles ahead, so you cannot mark in hindsight. **Go deeper** Marking every last opposite candle, with no displacement behind it, is the **most common mistake**. After a close through, many traders watch the old block as a possible breaker. A block marked on an H4 candle is unrefined. On M15 inside that candle, the last down-close candle is the refined block: a tighter zone and a smaller stop, at the cost of more missed fills and more false signals. In the backtester, each time a candle closes through a swing with displacement, pause, mark the last opposite candle from its open to its wick, and note what price did on its first return to the mean threshold. A block that points against the higher-timeframe draw on liquidity, or that formed without taking any liquidity, fails more often by most practitioners' accounts. That is their report, not a measured rate. Chapter 5 of 6 ## Order blocks against supply and demand zones If you took the DT Intensive, you already draw zones from [Day 11, supply and demand](https://www.thedtterminal.com/academy/supply-and-demand). An order block is a **stricter, candle-level version** of that idea. | | Supply or demand zone | Order block | | --- | --- | --- | | What you mark | The base: one to a few small candles before the move | One candle: the last opposite candle | | What it needs | A strong move away from the base | **Displacement and a break of structure** | | Its edges | Proximal on the base, distal on the far wick | Open to the far wick | | Its 50% level | Not usually named | The mean threshold, on the body | | After a close through | **The zone has failed** | It may become a breaker or a mitigation block | A fair value gap is different again. A gap is the untraded space between candle 1 and candle 3 of a fast move, and a block is a candle. They often sit side by side, as both examples below show. Chapter 6 of 6 ## Two worked examples Sample candles built from the course research, not real sessions. Times are New York time (EDT). Worked example ### Example 01: `EURUSD` M15: a bullish block in the London killzone The worked example, with every number walked through, is in the app. [Continue in the app, free](https://www.thedtterminal.com/login?signup=true&redirect=%2Fjournal%2Facademy%2Fict-order-blocks%3Fsection%3Dexamples%23examples) Free account Write the block as a rule a stranger could mark In Strategies, write your block: which candle, which marking, where the entry and stop go, and which window. Link each block trade to it. **The numbers, and a bearish example** Example 01 in full: the bias is bullish. At 02:45 the down-close candle sweeps the Asian low, 1.08420, to 1.08310. At 03:00 the displacement candle closes at 1.08560, above the 01:30 short-term high of 1.08520. New York and London change their clocks on different dates, so for about three weeks a year the London open lands an hour later on a New York clock. Linking each block trade to its strategy keeps its win rate and expectancy its own. Worked example ### Example 02: `NAS100` M5: a bearish block at the New York open The worked example, with every number walked through, is in the app. [Continue in the app, free](https://www.thedtterminal.com/login?signup=true&redirect=%2Fjournal%2Facademy%2Fict-order-blocks%3Fsection%3Dexamples%23examples) Free account Quick review ## Check yourself Quick review · 0 of 0 [All lessons in ICT Concepts](https://www.thedtterminal.com/academy/courses/ict-concepts) [Previous](https://www.thedtterminal.com/academy/ict-fair-value-gaps) ## Fair value gaps the ICT way Lesson 06 · 5 min read [Next in ICT Concepts](https://www.thedtterminal.com/academy/ict-breaker-and-mitigation-blocks) ## Breaker blocks and mitigation blocks Lesson 08 · 6 min read ## Try it on your own account Connect a broker and DT Terminal verifies every trade against it. Free to start. 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