Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

TinGull

Playing the Initial Balance

By TinGull, in Market Profile

Recommended Posts

TinGull    10

TinGull
Posted

I want to start a little discussion about the initial balance on MP. I've been noticing lately some patterns that are very interesting to me, and I wanted to get some other folks thoughts on it all.

 

So what is the initial balance? Its the range of trading over the first hour of the session. My sessions I have starting at 8:30am and closing at 5:01 for the YM. What I've been noticing is the size of the IB range and the explosiveness of the day. Also, the move to the outside of the IB range can have it's explosiveness told by the size of the IB usually. I know MrPaul trades with respect to an initial balance, though I don't know for sure his trading strategy with it.

 

So, here's a couple charts I wanted to post up over the last few days. It's interesting stuff and I think definitely warrants a discussion.

 

I'll post a series of pics, each of a different MP chart from the past 10 days or so of the YM. The IB lasts from 8:30 to 9:30 AM EST. This is very similar to Rauls Morning Breeze strategy, in that it's a kind of bracket strategy.

5aa70dbb51481_Picture3.thumb.png.563cb141d606289c5a9cbd0dbecd1465.png

5aa70dbb551af_Picture4.png.d4199093df59663351bc76573e9fb4fe.png

5aa70dbb58403_Picture5.png.93ee6e8215df8f10e36bf1f4d4b47299.png

5aa70dbb5c1eb_Picture6.png.868a2cbcaaf20c1e0679dd17d9680e4e.png

Share this post

Link to post
Share on other sites

TinGull    10

TinGull
Posted

Also, in the screenshots, the IB is the blue area at the left of the first round of TPO's. Sometimes there's a little fakeout, but if you do get faked out, so far it's looking like the other direction will provide you with more than enough to make up for the fakeout loss.

Share this post

Link to post
Share on other sites

Trader_JG    10

Trader_JG
Posted

TinGull, Do you trade directly after the IB at 9:30EST, or do you wait a half hour to an hour for all the overnight orders to get filled.

The 1st hour (2nd hour if you count premarket IB) the market is open is very volatile so I am still trying to figure out how to trade it

 

Thanks,

Jonathan

Share this post

Link to post
Share on other sites

Soultrader    12

Soultrader
Posted
TinGull, Do you trade directly after the IB at 9:30EST, or do you wait a half hour to an hour for all the overnight orders to get filled.

The 1st hour (2nd hour if you count premarket IB) the market is open is very volatile so I am still trying to figure out how to trade it

 

Thanks,

Jonathan

 

 

The first 30 minutes is one of my favorites. However, if you are still learning this game it can be quite difficult to initiate a trade during the initial opening minutes. Alot of emotions pass through. It helps if you understand how to read order flow or tape. Markets usually go only 2 ways at the open. Up or down. Usually they can go up, down, and sideways. So the opening has cut 3 options down to 2. My advice is to watch order flow and price carefully the first 3-5 minutes. Price is extremely jumpy around this time and is deciding which way to go. It may decide to test one level first before it reverses in the opposite direction. It is very fast and you must be able to see this on tape. You can look at the direction of TICK's. If TICK's open up negative and can not lift above the zero line on the first attempt, there is a good chance price will decline. However, the TICK can be a little tricky at the open as well so these are tools you willl need to become familiar with. Another method I use is taking the overnight high/low as the reference point for the opening. Let's say price open a few ticks below the overnigth high. At the open, price lifts to this reference point and sells off. This would be a quick short for me.

 

Hope this gives you an idea.

Share this post

Link to post
Share on other sites

TinGull    10

TinGull
Posted

JG, the IB is from 930-1030 EST, and I dont take the IB break often. IF the IB is extremely small, then the break of it is a great trade to take. That doesn't happen too often, though.

 

I'll ditto what Soultrader said :)

Share this post

Link to post
Share on other sites

Trader_JG    10

Trader_JG
Posted

Thanks for the replies guys.

TinGull, in your 1st post of this thread you said the IB was from 8:30-9:30, and now you say it is 9:30-10:30.

 

Which one is correct? I am taking the Cisco short course and the IB time frame still confuses me. They mention the 1st hour is the IB but sometimes show the pre market on the MP which makes me think it is the 8:20-9:30. Yet not much volume goes off at this time which makes me think it should be the later time frame.

 

JG

Share this post

Link to post
Share on other sites

Trotta    10

Trotta
Posted

Is this discussion still alive?

I also focus my trading method around the Initial Balance..However, I am also mindful (along with the width of the IB) of how the Value Area migration is developing.

 

I have also heard of something related to the Initial Balance referred to as the 95% rule.Anyone familiar with this term?

 

Opinions and views appreciated.

Share this post

Link to post
Share on other sites

TheNegotiator    13

TheNegotiator
Posted

Hi Trotta,

 

The 95% rule you mention probably refers to the number of times at least one side is broken. If you look back, there are very few examples which both the IB high and low end up the high and low of the day. The smaller the range of the IB usually the more likely it is to break.

 

Hope this helps.

Share this post

Link to post
Share on other sites

Trotta    10

Trotta
Posted

Thanks Negotiator.

 

That would make absolute sense. May observations also lead me to conclude that it is 'Rare' that the IB high and low is the high AND low of any given trading day.

 

I came across an article that said that the Initial Balance is now a somewhat outdated technique as 'gone are the days when floor locals could manipulate the price action of the market'.

 

Any trading rooms that one can recommend that specialize in Market Profile and Order Flow that are actually calling 'Live' trades?

Share this post

Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

×
Go To Topic Listing

  • Topics

  • Posts

    • Stocks4life
      Breakout and Swing Stock Ideas

      By Stocks4life · Posted

      AMZN Amazon stock, nice buying at the 187.26 triple+ support area at https://stockconsultant.com/?AMZN
    • Stocks4life
      Breakout and Swing Stock Ideas

      By Stocks4life · Posted

      DELL Dell Technologies stock, good day moving higher off the 90.99 double support area, from Stocks to Watch at https://stockconsultant.com/?DELL
    • Stocks4life
      Breakout and Swing Stock Ideas

      By Stocks4life · Posted

      MCK Mckesson stock, nice trend and continuation breakout at https://stockconsultant.com/?MCK
    • barako
      LMFX Broker Discussion

      By barako · Posted

      lmfx just officially launched their own LMGX token, Im planning to grab a couple of hundred and maybe have the option to stake them. 
    • HFblogNews
      HFMarkets (hfm.com): Market analysis services.

      By HFblogNews · Posted

      Date: 2nd April 2025.   Market on Edge: Tariff Announcement and Volatility Ahead!   The US economic and employment data continues to deteriorate with the job vacancies figures dropping to a 5-month low. In addition to this, the IMS Manufacturing PMI also fell below expectations. However, both the US Dollar and Gold declined simultaneously following the release of the two figures, an uncommon occurrence in the market. Traders expect a key factor to be today’s ‘liberation day’ where the US will impose tariffs on imports. USDJPY - Traders Await Tariff Confirmation! Traders looking to determine how the USDJPY will look today will find it difficult to determine until the US confirms its tariff plan. Today is the day when Trump previously stated he would finalize and announce his tariff plan. The administration has not yet released the policy, but investors expect it to be the most expansionary in a century. President Trump is due to speak at 20:00 GMT. On HFM's Calendar the speech is stated as "US Liberation Day Tariff Announcement". Currently, analysts are expecting Trump’s Tariff Plan to impose tariffs on the EU, chips and pharmaceuticals later today as well as reciprocal tariffs. Economists have a good idea of how these tariffs may take effect, but reciprocal tariffs are still unspecified. In addition to this, 25% tariffs on the car industry will start tomorrow. The tariffs on the foreign cars industry are a factor which will particularly impact Japan. Although, traders should note that this is what is expected and is not yet finalised. Last week, President Trump stated that he would implement retaliatory tariffs but allow exemptions for certain US trade partners. Treasury Secretary Mr Bessent and National Economic Council Director Mr Hassett suggested that the restrictions would primarily target 15 countries responsible for the bulk of the US trade deficit. However, yesterday, Trump contradicted these statements, asserting that additional duties would be imposed on any country that has implemented similar measures against US products. The day’s volatility will depend on which route the US administration takes. The harshness of the policy will influence both the Japanese Yen as well as the US Dollar.   USDJPY 5-Minute Chart   US Economic and Employment Data The JOLT Job Vacancies figure fell below expectations and is lower than the previous month’s figure. The JOLT Job Vacancies read 7.57 million whereas the average of the past 6 months is 7.78 million. The ISM Manufacturing Index also fell below the key level of 50.00 and was 5 points lower than what analysts were expecting. The data is negative for the US Dollar, particularly as the latest release applies more pressure on the Federal Reserve to cut interest rates. However, this is unlikely to happen if the trade policy ignites higher and stickier inflation. In the Bank of Japan’s Governor's latest speech, Mr Ueda said that the tariffs are likely to trigger higher inflation. USDJPY Technical Analysis Currently, the Japanese Yen Index is the worst performing of the day while the US Dollar Index is more or less unchanged. However, this is something traders will continue to monitor as the EU session starts. In the 2-hour timeframe, the USDJPY is trading at the neutral level below the 75-bar EMA and 100-bar SMA. The RSI and MACD is also at the neutral level meaning traders should be open to price movements in either direction. On the smaller timeframes, such as the 5-minute timeframe, there is a slight bias towards a bullish outcome. However, this is only likely if the latest bearish swing does not drop below the 200-Bar SMA.     The key resistant level can be seen at 150.262 and the support level at 149.115. Breakout levels are at 149.988 and 149.674. Key Takeaway Points: Job vacancies hit a five-month low, and the ISM Manufacturing PMI missed expectations, adding pressure on the Federal Reserve regarding interest rate decisions. Traders await confirmation on Trump’s tariff policy, which is expected to impact the EU, chips, pharmaceuticals, and foreign car industries. The severity of the tariffs will influence both the JPY and the USD, with traders waiting for final policy details. The Japanese Yen Index is the worst index of the day while the US Dollar Index is unchanged. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report.   Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news.   Michalis Efthymiou HFMarkets   Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.

  I accept