™An order block is the last opposing candle before a strong move — where a large participant is assumed to have filled orders. A fair value gap is the three-candle imbalance that move leaves behind. They describe two different parts of the same event: the order block is where it started, the gap is the ground it covered too fast.
Side by side
| Order block | Fair value gap | Breaker block | |
|---|---|---|---|
| What it marks | The last opposing candle before an impulse | The price range the impulse skipped | A failed order block, now acting from the other side |
| How it is drawn | That candle's body (or body to wick) | Between candle 1's wick and candle 3's wick | The broken order block's range |
| Idea behind it | Unfilled orders may still be waiting there | The auction was one-sided and is likely to be revisited | Trapped traders defend their break-even |
| When it is finished | Price closes decisively through it | Price trades fully through it | Price closes back through it again |
Why the strongest zones contain both
When an order block sits directly behind a fair value gap, the area tells one consistent story: orders were filled there, and the move away was fast enough to leave an imbalance. Many traders treat the combined range as a single zone and give it more weight than either part on its own. An order block with no gap in front of it usually means the move away was slow — a weaker signal of real displacement.
Where breaker blocks come in
An order block that price closes through is dead in its original direction. Sometimes it starts working the other way: a broken bullish block becomes resistance on the retest. That flipped zone is called a breaker block. It is a separate setup with its own logic — trapped traders from the failed block exiting at break-even — and it should be treated as new, not as "the old block, still valid".
Common mistakes
- Counting the same zone twice. An order block and the gap in front of it are one area, not two separate confirmations.
- Using either without structure. Both work best in the direction of a break of structure, not against a strong trend.
- Leaving finished zones on the chart. Remove blocks that were closed through and gaps that were filled.
See both on one chart
LTAI Chart marks order blocks and fair value gaps automatically, free in the browser. On TradingView, LTAI Price Action Concept keeps broken blocks as breakers, and LTAI Smart Levels removes dead blocks the moment price closes through them. Read the full guides: order blocks and fair value gaps.