What is a hidden order block (HOB)?
A hidden order block (HOB) is an order block whose entire candle body was later passed through by an imbalance, meaning price moved across it so quickly that nothing was filled there. Because that area was never properly traded, traders mark it as a level where price is likely to react when it returns.
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Start with the order block
An order block is the last candle against a move before price reverses and engulfs it: the last down candle before a rally, or the last up candle before a sell-off. The part that matters is the body of that engulfed candle, from open to close.
On most charts there are far too many order blocks to trade. The hidden order block is one way of filtering them down to the ones that were left untouched.
What makes it hidden
An imbalance, also called a fair value gap, is a three-candle move where the first and third candles do not overlap, leaving a stretch of prices that traded in one direction only.
When a later imbalance covers the whole body of an order block, price crossed that body without two-sided trading. The order block is still there, but it sits inside the gap rather than standing out on the chart. That is the hidden order block.
- HOB: the imbalance passes through the entire body of the order block.
- PHOB (partial hidden order block): the imbalance passes through part of the body only.
- A count such as 2x or 3x: more than one imbalance has passed through the same body.
How the level is drawn
Rather than a box, a hidden order block is often drawn as a single line at the midpoint of the body, its equilibrium. A line is easier to read when levels from several timeframes are on one chart, and it gives one price to watch instead of a zone.
Higher timeframe blocks matter more. A 4-hour, daily or weekly hidden order block is commonly marked on the lower timeframe chart used for execution, so that the level is already there when price arrives.
When it is used up
A hidden order block is a level waiting for its first return. Once price trades back into it, it has been mitigated and is usually removed. Some traders invalidate it on the first touch, others only when a candle closes through it. Pick one rule and keep it.
As with any level, a reaction is not guaranteed. It marks where to pay attention, and the entry still needs its own trigger and its own invalidation.
Indicators that draw this
- HOB / PHOB / BB: Hidden order blocks, Bojan triple sweeps and unfinished candles from ten timeframes, on one chart.
Questions.
What is the difference between an order block and a hidden order block?
Every hidden order block is an order block, but not the other way round. It becomes hidden when a later imbalance passes through its whole body, which means the area was crossed without being traded on both sides.
What does PHOB mean?
Partial hidden order block. The imbalance covers only part of the order block's body instead of all of it. It is read the same way as a HOB and usually given less weight.
Which timeframes are hidden order blocks marked on?
Any, but they are mostly taken from higher timeframes such as 4-hour, daily and weekly and then displayed on the lower timeframe chart used for execution.