Bullish vs Bearish Order Blocks in ICT: What They Are and How to Trade Them

One of the first things that confuses ICT traders when learning order blocks is the direction logic: a bearish candle is a bullish OB, and a bullish candle is a bearish OB. That seems backwards until you understand what those candles actually represent at the institutional level.

This post explains both OB types clearly, covers the institutional logic behind each, and walks through the exact entry process - including the step that most traders skip, which is also the step that determines whether the trade works.

Why Opposing Candles Create Order Blocks

Institutions do not buy in a straight line. Before a major bullish move, they are accumulating - placing buy orders while absorbing the sell-side pressure that is pushing price down. The bearish candles that precede the bullish displacement are not institutions selling; they are institutions buying into weakness, absorbing retail shorts and stop orders.

The last bearish candle before the displacement is where the final round of institutional buying took place. That is the OB. When price returns to that candle's body, it is returning to the price level where institutions placed their buy orders. They now have reason to defend that level - completing the original position fill.

Bullish Order Block: Definition and Identification

A bullish OB is the last bearish candle before a strong bullish displacement. The body of that candle - from its open to its close - marks the zone. When price returns into that range, you are watching a zone where institutional buy orders were placed.

• →Candle color: bearish (red/down) - this is the opposing candle that makes it a bullish OB
• →Position: the last bearish candle immediately before the bullish displacement begins
• →Zone: the body only (open to close) - wicks are excluded from the primary entry zone
• →Displacement requirement: the bullish move following it must be strong - large bodies, minimal wicks, closes beyond structure
• →Best location: at or near a liquidity level (equal lows, previous swing low, stop cluster) that has just been swept

The bullish OB is most powerful when it forms after a sweep of buy-side liquidity on the lower timeframe. Institutions sweep the lows to trigger retail stop orders and fill their buy positions, and the OB marks exactly where that filling took place.

Bearish Order Block: Definition and Identification

A bearish OB is the last bullish candle before a strong bearish displacement. Same logic in reverse - institutions were distributing (placing sell orders) while price was still moving up, absorbing retail buy orders. The last bullish candle is where that distribution concentrated before they drove price lower.

• →Candle color: bullish (green/up) - this is the opposing candle that makes it a bearish OB
• →Position: the last bullish candle immediately before the bearish displacement begins
• →Zone: the body only (open to close) - the range between the candle's open and its close
• →Displacement requirement: the bearish move after it must be impulsive and leave an imbalance
• →Best location: just below a liquidity level (equal highs, prior swing high, stop cluster) that has just been swept

Which Order Blocks to Trade: HTF Bias Is Non-Negotiable

Not every OB is tradeable. The direction of the OB must align with the higher timeframe structure. This is the filter that separates high-probability setups from coin flips.

If the daily structure is bullish - price making higher highs, higher lows, with liquidity sitting above - then you are only taking bullish OB setups. A bearish OB at the same time is a counter-trend trade. It might work, but you are fighting the institutional delivery direction, which means lower probability and shallower moves.

• →Bullish OBs only when HTF bias is bullish (higher highs, higher lows, sell-side liquidity recently swept)
• →Bearish OBs only when HTF bias is bearish (lower highs, lower lows, buy-side liquidity recently swept)
• →Counter-trend OBs: only with significantly stronger confluence (BPR, FVG overlap, HTF liquidity sweep at the exact zone) and smaller size
• →Confirm weekly direction first, then daily - LTF OBs should point the same way

Mitigation: When an OB Is No Longer Valid

Every OB has a lifespan. Once price returns and trades fully through the body - from the open to the close, or beyond - the zone is consumed. Institutions have completed their fill. There is no longer a pending order at that level in the original direction.

For a bullish OB: if a candle's body closes fully below the OB body's low, the zone is mitigated. For a bearish OB: if a candle's body closes fully above the OB body's high, the zone is mitigated. Once mitigated, the OB may flip to a breaker block - a zone that now attracts price in the opposite direction. Remove the OB from your watchlist or relabel it accordingly.

The Entry Process for Both OB Types

The entry process is identical for bullish and bearish OBs - only the direction changes. Here is the exact sequence:

1. 1.Confirm HTF bias - daily or 4H structure points in the direction of your OB
2. 2.Identify the OB - last opposing candle before a strong displacement, unmitigated
3. 3.Wait for price to return to the OB zone - set a TradingView alert, do not watch manually
4. 4.When price enters the zone, drop to the lower timeframe (15m or 5m)
5. 5.Watch for a micro-sweep - for a bullish OB, price may sweep the low of the zone; for a bearish OB, price may sweep the high. This sweep sets up the reversal.
6. 6.Wait for CISD to fire - a structural break on the lower timeframe that confirms delivery has shifted in the direction of your bias
7. 7.Enter on the CISD signal - stop below the OB zone low (bullish) or above the OB zone high (bearish)

Bullish OB vs Bearish OB Entry Comparison

The symmetry between the two types is intentional. Once you understand the bullish OB entry sequence, you understand the bearish one - the logic just mirrors. The core principle is the same in both cases: the OB is the location where institutions operated, and CISD is the evidence that they are operating there again.

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