Two rules, two ways to get it wrong
A valid order block needs both criteria: it took liquidity AND it left an FVG. Drop either one and the zone is hollow — it looks the part, but price runs straight through it on the return. These are the two mistakes that turn an "order block strategy" into a losing one.
Mistake 1 — no liquidity ❌
- The candle never swept the previous candle's low/high.
- No stops were run, no institutions filled.
- "Mark a block that took no liquidity and you become the liquidity."
Mistake 2 — no FVG ❌
- The move after it is slow and overlapping.
- No imbalance, no displacement, no real institutional move.
- Liquidity alone is not enough — the gap is the proof.
- Valid OB = liquidity taken AND an FVG left behind — both, every time.
- No sweep of the prior candle = no liquidity = not an OB.
- No FVG (overlapping candles) = no real displacement = not an OB.
- An invalid block blows straight through on the first return.
- Working backward from the break protects you from drawing boxes everywhere.