An order block is the last opposing candle before a strong institutional move — the final bearish candle before a bullish impulse (bullish OB) or the final bullish candle before a bearish impulse (bearish OB). Order blocks represent zones where institutions placed large orders, and price tends to return to these zones for continuation.
Bullish OB: last bearish candle before a strong up-move. Bearish OB: last bullish candle before a strong down-move. The candle's body (not wicks) defines the zone. Must cause a displacement (strong, fast move away). Breaker blocks form when OBs are violated.
Price retracing into a bullish OB at support, Price retracing into a bearish OB at resistance, OB in confluence with FVG or liquidity sweep, OB on a higher timeframe with lower-timeframe entry
Stop below the OB low (bullish) or above OB high (bearish), Target the previous liquidity pool or opposing OB, Invalidation: if price closes through the OB body
15M for entries, 1H/4H for OB identification, Daily/Weekly for HTF bias
Not every candle before a move is a valid OB. True OBs must cause displacement — a strong, impulsive move with large-bodied candles away from the zone.
Kill zones are specific time windows during the trading day when institutional activity peaks and the most significant moves occur. ICT identifies four main kill zones: Asian session (20:00–00:00 ET), London Open (02:00–05:00 ET), New York Open (07:00–10:00 ET), and London Close (10:00–12:00 ET). Trading only during kill zones improves probability.
Mitigation blocks are price levels where institutional traders return to 'mitigate' or close out prior losing positions before continuing in the new trend direction. When smart money takes a position that initially moves against them, they mark the level for re-entry — when price returns, they close the losing trade at break-even and add to their new directional position. This creates a powerful support or resistance zone.
Institutional candles (also called displacement candles or impulse candles) are large-bodied candles with little to no wicks that represent strong institutional activity. They break through structure and create FVGs. The characteristics of these candles — body size, wick ratio, volume — reveal where institutions are committing capital.
Liquidity sweeps (also called stop hunts or liquidity grabs) occur when price moves through an obvious support or resistance level to trigger stop losses and pending orders, then reverses. Institutions use these sweeps to fill large orders at better prices. Identifying potential liquidity pools (clusters of stops) is central to SMC trading.