Initial Balance (IB)
Introduction
The Initial Balance (IB) describes price behavior relative to the high and low established during the first hour of the regular trading session (9:30–10:30 ET).
The IB defines early-session balance and provides structure for evaluating how price behaves for the remainder of the day. Once the first hour completes, the IB High and IB Low act as reference levels for directional acceptance, rejection, and range expansion.
The IB framework tracks whether price:
breaks above the Initial Balance,
breaks below it,
breaks both sides, or
remains contained within the Initial Balance for the entire session.
The probabilities of these outcomes vary significantly by instrument and should be reviewed regularly.
Key outcomes used throughout these reports
Breakout: Price only breaks the IB High.
Breakdown: Price only breaks the IB Low.
Double break: Price breaks both the IB High and the IB Low at some point during the session.
No break: Price remains within the IB High and IB Low for the entire session.
Unless otherwise specified, a “break” refers to price trading beyond the IB boundary at any point during the regular trading session.
How do I set up my chart for this strategy?
To plot the Initial Balance, wait for the first hour of the regular trading session to complete. Once 9:30–10:30 ET has passed, draw:
a horizontal line at the highest price traded during that period (IB High), and
a horizontal line at the lowest price traded during that period (IB Low).
If you are using TradingView, you can load the Initial Balance indicator included with your QUANTIS subscription, which automatically plots these levels.
Standard Subreport
What does the Standard Subreport measure?
This report measures how often each IB outcome occurs. It answers:
How often do breakouts occur?
How often do breakdowns occur?
How often do double breaks occur?
How often do no-break days occur?
How can I use this?
This report helps establish directional bias before or shortly after the IB completes.
For example:
If breakouts or breakdowns dominate, continuation after the first break is statistically more likely than a double break. In these environments, waiting for a retracement to enter in the direction of the break may be optimal.
If double breaks are most common, be cautious about committing to the first move. These environments often favor two-sided trade and failed directional follow-through.
Example
Assume the Initial Balance forms as follows:
IB High: 6,100
IB Low: 6,000
Possible outcomes (evaluated across the full regular trading session):
Breakout: Price trades above 6,100 and never trades below 6,000.
Breakdown: Price trades below 6,000 and never trades above 6,100.
Double break: Price trades above 6,100 at some point and below 6,000 at some point.
No break: Price remains between 6,100 and 6,000 all day.
These outcomes are mutually exclusive.
Weekday Subreport
What does the Weekday Subreport measure?
This report shows the same IB outcomes as the Standard view, segmented by day of the week. It highlights whether certain weekdays consistently behave differently—for example, whether Mondays differ from Fridays or whether double breaks cluster on specific days.
Differences across weekdays can arise from macroeconomic scheduling, options expiration cycles, or recurring institutional positioning.
How can I use this?
Use weekday tendencies to adjust expectations:
If a weekday historically produces more single-direction breaks, prioritize continuation setups.
If a weekday produces more double breaks, avoid overcommitting to the first move and plan for potential reversals after one side of the IB is taken.
Size Subreport
What does the Size Subreport measure?
This report groups IB days by the size of the Initial Balance and tracks how outcome distributions change across the following size buckets:
0–0.2%
0.2%–0.39%
0.4%–0.59%
0.6%–0.89%
0.9%+
IB size is calculated as:
IB Size (%) = (IB High − IB Low) / IB Low × 100
How can I use this?
Use IB size as a contextual filter:
Certain IB sizes are associated with more single-break days, favoring continuation strategies.
Other sizes correlate with more double breaks, implying increased two-sided trade and tighter risk management.
Example
IB Low: 6,000
IB High: 6,050
IB Range: 0.82%
This day would fall into the 0.6%–0.89% size bucket.
Close Subreport
What does this measure?
This report tracks where price tends to close relative to the Initial Balance. It shows how often price finishes:
above the IB High,
within the IB range, or
below the IB Low.
How can I use this?
Use common close locations to guide trade management:
If price is in an area where it rarely closes, structure trades toward areas with higher close frequency.
If price is already in a zone where it commonly closes, avoid trades that require it to leave that zone.
This supports entries, exits, stops, and targets based on historical behavior—not expectation.
Performance Subreport
What does this measure?
This report measures the extension of the first break from the Initial Balance—how far price travels beyond the IB boundary before returning back inside the range.
Extension is measured from the IB boundary in the direction of the first break to the furthest price excursion before re-entry.
Only the first breakout or breakdown of the day is evaluated.
You can define both the break and the return:
By wick: any touch counts, or
By close: a candle close is required.
If price never returns inside the IB, the session high or low is used to avoid truncating trend days.
How can I use this?
Use extension statistics to set realistic, data-driven targets:
If the typical extension is modest, treat it as the baseline expectation.
Use extension data to guide scaling out and stop placement.
Your TradingView indicator can optionally plot average and maximum IB extensions derived from this report.
Retracement Subreport
What does this measure?
This report focuses on single-break IB days and measures how often price retraces a portion of the IB range after the initial break and before any opposite-side break occurs.
Retracement levels tracked:
25%
50%
75%
Retracements are measured relative to the direction of the first break.
How can I use this?
Use retracement frequencies to plan entries and risk:
Frequently reached retracement levels can serve as entry zones or risk references.
This helps anticipate normal pullbacks rather than reacting emotionally.
Levels Subreport
What does this measure?
This report tracks how often price reaches specific multiples of the IB range after leaving the Initial Balance.
Levels are defined as multiples of the IB range in both directions:
0.5x, 1x, 2x, up to 4x
How can I use this?
Use frequently reached multiples as probability-supported reference levels:
Commonly reached levels can serve as planning or profit-taking references.
Rarely reached levels should not be required for a trade to work.
Time Subreport
What does this measure?
This report evaluates when Initial Balance breaks tend to occur. You select:
Single-break or double-break days, and
A time threshold (for example, 12:00 ET).
The report then shows how often the relevant break occurred before versus after the selected time.
How can I use this?
Use timing tendencies to improve focus:
If most IB breaks occur early, prioritize earlier trade windows.
If breaks tend to occur later, avoid forcing trades immediately after the IB completes.