Bullish Order Block vs Bearish: How to Tell Them Apart

Most definitions get there in one line: a bullish order block is the last down candle before a move up, and a bearish one is the last up candle before a move down. On most charts that points at the right candle, because the lowest bar of a drop usually closed down.

When the lowest candle closed up, the one-line rule moves the zone onto a different candle, and every level drawn from that zone moves with it, the stop included. It happens less often than the common case, and it is much harder to notice while it is happening.

What is a bullish order block?

A bullish order block is the price zone a falling move leaves behind at its lowest candle, when two things are true at once: that candle took the low of the candle before it, and the rally away from it left an unfilled imbalance above it. The zone covers the candle's whole range, wick to wick.

The first condition is about liquidity: the sell stops resting just under the previous candle's low, placed there by traders who bought that candle. A wick through the low fills them, and a large buyer needs exactly that kind of resting volume to build a position without chasing price. The story is a model; nobody can confirm it on a chart. The wick through the previous low is something you can confirm, and that is what the rule asks for.

The second is the imbalance: a gap between the block candle's high and the low of the candle two bars later, which price has not traded back through. It marks a move that left too fast for both sides to trade. If the candle you picked has no such gap after it, it is not the block. Move one candle forward along the rally and check again, until one candle carries both conditions. That is why a block sometimes sits a candle or two into the move rather than exactly at its low.

The zone runs from the candle's high to its low. Textbook diagrams often box only the body, but the indicator boxes the full range, and the wick is the part that took the stops.

What a bullish order block gives you is a place, not a signal: an area below price where a reaction up is worth watching for when price comes back. Which blocks in a leg are worth working, and how the entry and the stop are placed, is the subject of the full order block trading guide.

How do you tell a bullish order block from a bearish one?

By the side of price it sits on and the extreme it took. Bullish and bearish order blocks follow one rule, mirrored. A bullish block forms at the low of a move and sits below price; a bearish block forms at the high of a move and sits above it. The two conditions are identical on both sides, and only the direction flips.

Read the bearish column against the bullish one and it is the same column with high and low swapped. That symmetry is useful in practice: whatever you learn about one side, including how it fails, carries over to the other.

The last row needs a caveat. Supply and demand zones come from an older school of chart reading and are usually drawn without the liquidity and imbalance conditions, so a demand zone and a bullish order block often overlap without being the same object. When someone calls a level "demand", it is worth asking which candle they boxed and why.

What breaks a bullish order block?

A candle body closing below the zone's low. That is the one event that ends a bullish order block's role. A wick that pokes below the zone while the body closes back inside does not end it: that is a sweep of the stops parked under the zone, the same mechanism that formed the block in the first place. For a bearish block, mirror it: a body close above the zone's high.

The method treats an order block the way it treats a structure level: only a close counts. A wick under the zone tells you the orders resting there were filled, which is a fact about those stops rather than about the zone. A candle that closes below the low tells you more: when the period ended, price was still being accepted under the zone and buyers had not pushed it back. How a sweep differs from a break, including the case where several wicks probe the same level in a row, is covered in the guide to liquidity sweeps.

What happens to a zone after a real failure, when a broken block starts to act from the other side, is a separate topic. You do not need it to tell the two directions apart, and it is left out here on purpose. One version of it, the block broken after a swing that never reached the previous low, has its own guide: what is a mitigation block.

Does the colour of the candle decide which one it is?

No. The direction of an order block comes from where it formed and which extreme it took, not from whether its body closed up or down. A bullish order block is the lowest candle of the drop that took the previous low, and that candle can close green. The "last down candle" rule is a shortcut for the common case, and it fails on the uncommon one.

The shortcut has a respectable source. ICT-style teaching describes the bullish block as the last down-close candle before the up move, and on most charts that candle and the lowest candle of the drop are the same bar. The figure shows a chart where they are not. The drop pauses on a small down candle that never trades below the bar before it. The next candle sweeps the low of that pause with its wick, closes up and starts the rally, and the rally leaves a gap above it.

By the colour rule, the block is the small down candle, since it is the last one before the move. By the method, it is the candle that took the low, because that is where the liquidity was taken and where the imbalance begins. The small candle took nothing and left no gap of its own: the next candle but one trades back down through its high.

The reason is mechanical. The indicator this method is built on reads three numbers from each candle: the high, the low and the close. The open, and with it the colour, does not enter a single condition: two conditions define the block, and neither mentions which way the body closed. The course the method is drawn from goes further and draws a bearish block on an up candle without comment, because the candle that took the high happened to close up.

The cost shows up in the stop. The colour rule's zone sits inside the real block, close to its top. A stop under it sits above the wick that already swept the stops there once, which is the kind of level the previous section describes being taken before price turns. The real block's low is further down. A stop that respects the block goes under that low, with the position sized to fit the distance rather than the other way round.

Which side should you be looking for?

The one the trend points to. The side of a block is a fact about where it formed; whether to work it is decided by the trend on your working timeframe. In an uptrend, bullish order blocks are the with-trend zones. A bearish block at the top of an up leg is a counter-trend zone, and the method treats it differently.

Read the trend on one working timeframe. A sequence of higher highs and higher lows is an uptrend, lower highs and lower lows a downtrend; what those labels mark, and the event that has to happen before each one appears, is laid out in the market structure guide. Switching timeframes to see whether a block "looks better" gives you a second structure and a second answer.

In an uptrend, the bullish blocks left by each pullback are where the method looks for longs. A bearish block forms at the top of every up leg as well, and it is a valid zone by the two conditions, but working it means trading against the trend. The method allows that in specific conditions, with fewer entries and the target at the first pool of liquidity rather than at a new low. In a downtrend the same holds with the words swapped.

Bullish blocks inside one up leg do not carry equal weight either. Two of them do: the first one after the inducement, the shallow pullback whose low attracts early stops, and the last one before the structure breaks. Blocks between those two tend to act as bait. The reasoning is in the pillar guide linked above.

How Money Hunter draws both sides

Marking this by hand means checking two conditions on every candidate and resisting the colour shortcut every time a drop ends on a green candle. It is easy to skip, and the skip does not show until the zone is compared with something that applied the rule.

Money Hunter applies the same two conditions on TradingView and MetaTrader. Each block sits on the candle that took the liquidity, covers that candle's full range and carries its role, OB-IDM or OB-EXT. Bullish and bearish blocks get separate colours, which you set in the indicator's settings, so the side reads at a glance.

Once a block is drawn, it stays on the candle that earned it and does not move. That is checkable rather than a promise: run the 100-bar replay test on any symbol and compare the blocks before and after new bars arrive.