In the trading room of Vtrender we have been tracking for quite some time a variation of an Initial Balance setup first popularized by Kris and RM .
The set up is that after an Initial Balance ( IB) is formed in the first hour, we are on the look out for range extensions in the next 30 minutes.
When such extensions happen in the period between 10.15 am and 10.45 am , we are then looking for the market to come back into the IB, following which we get a trade setup activated which takes the market to the other extreme of the IB.
Hope Fully this chart would explain it better :
The blue horizontal lines are the Initial balance (IB) or the first 60 minutes of the day.
Time wise it is being represented by the purple lines.
The orange lines are the next 30 minutes or the period between 10.15 and 10.45 am.
If it enter IB again from day high to below IBH it is a short and represented by pink in the chart ( pink will be on top of the orange)
If it enters from IBLow and goes up it is green ( green on top of the orange).
We have three variations of this set up in the past three days.
Monday we went short, tuesday the setup was long and today the condition was not met, so no trade alert was there.
Let’s look at these conditions for the trade to set up :