Rejection Block

Definition

A Rejection Block is defined by the wick range (not the body) of a candle that forms at a swing point after sweeping liquidity. The candle sweeps through a liquidity level (old highs or lows), then closes back inside the previous range, leaving a long wick. When price later retraces to this wick zone, it often reacts as support or resistance. A Bullish Rejection Block uses the lower wick range of a candle that swept sell-side liquidity (between the body low and the wick low). A Bearish Rejection Block uses the upper wick range of a candle that swept buy-side liquidity (between the body high and the wick high).

Why It Matters

Rejection Blocks offer entries at deeper retracement levels (80-90% of the swing range) compared to Order Blocks (which sit at 50-70%). This provides tighter stop losses and better risk-to-reward ratios. The tradeoff is that price reaches the Rejection Block zone less frequently and may reject more aggressively (less time to enter). When price does reach this deeper level, it signals strong conviction from smart money at that specific wick area.

How to Identify

1. Look for a candle at a swing high or swing low that has a long wick relative to its body — this is the 'rejection candle'.
2. Confirm that the wick swept a liquidity level: old swing highs/lows, equal highs/lows, session extremes, or other defined liquidity.
3. Confirm that price then shifted market structure (MSS/BOS) in the opposite direction after the sweep, validating the rejection.
4. Mark the Rejection Block zone: for Bullish Rejection Block, the zone is from the candle's body low to the wick low (the lower wick range). For Bearish Rejection Block, the zone is from the candle's body high to the wick high (the upper wick range).
5. Wait for price to retrace into this wick zone for a potential entry.

How to Trade

1. Identify a liquidity sweep at a swing point with a subsequent MSS/structure shift confirming the rejection direction.
2. Mark the Rejection Block zone (the wick range between body edge and wick tip of the rejection candle).
3. Wait for price to retrace back into the Rejection Block zone. Use a limit order at or near the 50% midpoint of the wick range for precision.
4. Stop loss beyond the wick tip (the extreme of the rejection candle). This is typically a tight stop.
5. Target the next liquidity pool in the trade direction. Because the stop is tight, the risk-to-reward ratio is often excellent (3:1+).
6. Be aware that Rejection Blocks have a higher failure rate than Order Blocks — price may blast through the wick zone on aggressive moves. Use HTF confluence to filter.

Common Confusions

Pre-Trade Checklist

• Swing high/low with long wick?
• Liquidity swept at the extreme?
• Structure shift after rejection?
• Wick range marked as zone?

Related Concepts

More Order Block Concepts