A valid order block must break the low/high of the previous candle—this is the liquidity sweep.
If there’s no break, it’s not valid. Simple.
After the order block candle, if the price moves with strong momentum, a gap often forms between candle wicks. This is known as a Fair Value Gap (FVG) or price imbalance.
Draw a box between the wick high of the order block and the wick low of the third bullish candle. If there’s a gap = You’ve got an imbalance.
If the third candle’s wick touches the OB, it’s invalid—it already got filled.
If price hasn’t yet touched the order block zone, it’s unmitigated = Valid.
If it’s already tapped once, it’s mitigated = Not reliable again.
If the price makes a clear BoS near the order block zone, it strengthens the case for a valid OB.
You need a clean move that breaks previous structure levels.
This is where smart money traps retail traders.
Price creates a fake breakout (inducement) above resistance or below support, then reverses into the order block. Trapped traders = liquidity = fuel for the real move.
