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Order Block Retestthe last opposing candle before the move

Evidence: WeakIntermediateMarket structure · Level

The last down candle before a strong move up is marked as a zone, and a return to it is treated as a place to buy. The reasoning offered is that institutional orders were placed there and that some of them remain unfilled.

That reasoning is not testable — nobody outside the counterparty can see where those orders were. What is testable is the level, and a level at the origin of a strong move is a reasonable level for the same reasons every other level in this library is: price left from there, so orders are likely to rest there.

Traded as a level, this works about as well as other levels do. Traded as a claim about institutional intent, it invites a confidence the evidence does not support.

The vocabulary on this page comes from trading education, not from research. Where it renames something with real support, the page says so. A name is not a finding.

Category
Market structure · Level
Timeframe
H1 or H4 · the zone from H4 or D1
Suitable pairs
Majors · gold · indices
Session
The originating move must be from London or New York
Indicators / tools
The origin candle's high and low · ATR(14) · a displacement filter

Valid setup

MS-07 · ORDER BLOCK RETEST — VALID SETUP USDJPY · H1 · the last down candle before a move that displaced 2 × ATR and broke structure LONG 150.90 151.47 152.03 152.60 153.17 153.74 154.31 THE ZONE — one candle, defined by its own high and low TP1 = 2R 1R TP1 = 2R, then the displacement high ENTRY = close back out of the zone, first touch STOP = the zone's low − 0.3 × ATR(14) 1 2 3 4 153.76 152.44 151.78 ① The origin candle — nothing special about it yet ② 2 × ATR of displacement, and a prior swing taken out ③ Those two filters are what make the zone rare ④ First touch, close back out — enter ⑤ Second and third touches are not this setup ⑥ A close through the far side ends it. No interpretation

Exact rules

Entry

  • Displacement filter first: the move away from the zone must cover at least 2 × ATR(14) within three bars. Without displacement this is just the last red candle, and there are thousands of those.
  • The zone: the origin candle's own high and low. Not a hand-drawn box around several candles.
  • The move must also have broken structure — taken out a prior swing point. A big move that broke nothing is not the event this setup describes.
  • Entry: first touch of the zone, with a close back out of it in the original direction.

Stop loss

  • Below the zone's far edge, minus 0.3 × ATR(14).
  • First touch only. Second and third touches of the same zone have a noticeably worse record, for the same reason repeatedly tested levels are weaker everywhere else in this library.
  • Risk 0.5%.

Take profit / exit

  • TP1 at 2R.
  • TP2 at the high of the displacement move.
  • Out if price closes through the far side of the zone — that is the invalidation and it is unambiguous, which is the setup's best feature.

Build Order Block Retest

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More from Market structure

Break of Structure ContinuationBOS, then a higher lowChange of Character ReversalCHoCH, then a lower highLiquidity Sweep → Market Structure Shiftthe full sequence

Trading carries risk and most retail accounts lose money. Nothing on this page is financial advice or a recommendation to trade. The chart is an illustration of the rules on constructed candles — it is not a record of a trade and not a backtest.