summary: the initial balance (IB) is the price range during a session's first hour — a key reference for breakout and retracement trading. edgeful offers 2 IB algo variants: the standard IB and the IB breakeven stop. customize your IB timeframe, use retracement data to plan entries, and structure stop/target levels based on historical data.

want a no-prep starting point? grab the free IB algo playbook (GC) — a gold futures IB playbook, no account required.

IB captures the opening trading range before the market fully develops. most traders monitor the first 60 minutes of a session. for US equities, that's 9:30–10:30 AM ET.

the IB range is measured from the session's highest price to lowest price during that window — not open-to-close. this range acts as your anchor for the entire day's trading. price either breaks out decisively or retraces back into it, and the data tells you how often each happens.

NY session: 9:30 AM to 4:00 PM ET | IB range: 9:30 AM to 10:30 AM ET

London session: 3:00 AM to 11:00 AM ET | IB range: 3:00 AM to 4:00 AM ET

you can customize these times in edgeful. if you trade the globex open at 6:00 PM, set your session and IB accordingly. consistency is everything — same times every day keeps your data clean.

edgeful offers 2 IB algo indicators in TradingView:

IB (standard) — the core initial balance strategy. enters on retracement back into the IB range after a breakout, using a single take-profit target. this is the version to start with.

IB — breakeven stop — same entry logic as the standard IB, but after hitting your first profit target, the algo automatically moves your stop-loss to your entry price (break-even). this protects your gains while letting the remaining position run for additional upside.

entry: price breaks out of the IB range, then retraces back into it at your configured retracement level.

TP1 hit: once the trade reaches your first profit target, the algo moves your stop-loss to break-even — your original entry price.

from there: the trade continues running. if price keeps moving in your favor, you profit more. if it reverses, you exit at break-even — zero loss on the remaining position.

the breakeven stop variant works best in trending markets where you want to protect early gains without cutting the trade short. in choppy or mean-reverting conditions, the standard IB with a fixed target may perform better — backtest both to compare.

start with the standard IB. once you're comfortable with IB entry logic and have a working backtest, run the breakeven stop variant on the same instrument and compare profit factor, win rate, and max drawdown in the strategy tester. the version with better risk-adjusted returns on your instrument becomes your production setup.

don't run both variants on the same chart — alerts will overlap and create conflicts. pick one per chart/ticker.

IB runs on the NY session (9:30–10:30 ET) and the London session (3:00–4:00 AM ET). if you want to run it on both sessions on the same ticker, the rule is one session per chart tab — not stacked on a single chart. filters also need to be re-tuned per session because London IBs run smaller than NY IBs on the same ticker.

full walkthrough: running IB on 2 sessions — NY and London walkthrough.

the key settings to dial in are the extension targets, midpoint, stop loss, and entry cutoff time.

a great starting point is to use one of the edgeful algo templates — once you select a template, we recommend continuing to optimize from there.

https://www.edgeful.com/algos-automation/algo-settings

step 1: add a daily or hourly timeframe to TradingView. identify the session open clearly.

step 2: use TradingView's Measure Tool to mark the IB high and low — measure from highest to lowest price during your IB window. this gives you exact price levels.

step 3: note the IB range size. larger ranges often signal elevated volatility; tight ranges suggest a slow open.

by default, edgeful sets IB to 1 hour from session open. but if your session starts at 2:00 PM and you want to analyze the first 90 minutes instead, you need to customize.

step 1: open the report you want to modify (e.g., IB retracement report).

step 2: click the customize button in the report settings.

step 3: find the initial balance settings and adjust the duration. options include 30 minutes, 1 hour, 90 minutes, 2 hours, etc.

step 4: save and regenerate the report with your new IB settings. backtest over 6+ months to validate that your custom timeframe produces consistent edge.

after the first hour, price does one of two things: it breaks out of the IB range, or it stays trapped inside and retraces back to the IB boundaries.

breakout day: price closes above IB high or below IB low. the trend is established.

inside day/retracement: price stays within the IB range or comes back into it after an initial extension. entries live here — you're fading the initial move and catching the pullback.

edgeful's IB reports show you exactly how often each scenario plays out on your instrument — so you know whether to fade or follow.

IB retracements show how often price pulls back into the IB range after breaking out, and how deep those retracements go. the numbers are cumulative — they layer on each other.

after price breaks above the IB high (or below it), it typically pulls back into the range. edgeful's IB by retracement report shows you 3 critical levels: 25%, 50%, and 75% back into the IB range.

here's how to read it — and this trips people up, so pay attention:

58% at 25%: 58 out of 100 breakout days see price pull back into the IB by at least 25%.

22% at 50%: of the 58 that reached 25%, 22 go on to retrace 50% deeper. this is NOT 22 out of 100 — it's nested within the 58%.

the remaining 36%: reach 25% but don't go deeper — they reverse before hitting 50%.

understanding this cumulative structure is key to setting realistic entry and stop levels.

the data tells you which retracement level gets hit most often — and which ones are weak. don't guess where price will retrace. let the data guide your entry.

if the data shows 68% of breakouts retrace to the 25% level, you enter there — knowing the odds are in your favor. you skip the 50% retracement because the data shows it's hit less frequently, so holding past 25% often means missing the move.

approach 1: place your stop at 50% if you're confident in the 36/22 split. this gives you room for the deeper retracements without getting stopped out prematurely.

approach 2: use tighter stops at 35% retracement if you want to minimize loss on the 22% that go deeper.

choose based on your risk tolerance and position size.

on a breakout above IB high: place your stop just below the IB low. if price closes back inside the range, your thesis is broken and you're out.

on a breakout below IB low: place your stop just above the IB high. same logic, opposite direction.

the IB by levels report shows you the exact dollar distance of this stop — so you know your actual risk before you enter.

once you're in a breakout trade, edgeful's IB extension levels show you where price typically stalls after breaking the IB range. instead of a single target, scale out: take partial profits at the first extension, let the rest run to the second extension.

a common approach: use the IB range size itself as your target. IB range is 50 pips — you buy a breakout at IB high, set stop at IB low, and target profit at IB high + 50 pips.

the opening candle (first 5-min or 15-min candle of the session) often telegraphs the day's direction. when it aligns with IB breakouts, you've got 2 data points agreeing — that's confluence.

if the opening candle is bullish AND price breaks above the IB high: that's a stronger setup than either alone.

if they conflict (bullish opening candle but price breaking below IB low): that's a warning. the setup is weaker.

IB algo not triggering? walk through these in order:

always test changes in simulation first before pushing them to live.

this one trips people up — and it's the kind of thing you can stare at for an hour before you spot it. so here's the rule, clearly:

in math terms: min ≤ IB size < max.

a concrete example. say you set min IB size = 20 pts and max IB size = 60 pts. here's what triggers and what doesn't:

why it works this way. if you stack filters — say, one algo for 20–60 pt IBs and another for 60–100 pt IBs — an exclusive max prevents the same day from triggering both. no double-counting. clean buckets.

the fix if it's costing you trades. if the IB you want to catch is sitting right at your max value, bump the max up slightly. a max of 60.1 will catch a 60 pt IB. a max of 60 will not.

this same rule applies across all edgeful algos with min/max filters — gap fill, engulfing candle, ORB, and IB. min inclusive, max exclusive, every time.

test your IB approach in TradingView's Strategy Tester over 12+ months. compare win rate and profit factor for breakout-only entries vs. retracement entries — this reveals which method suits your asset and timeframe better.

if you're deciding between the standard IB and the breakeven stop variant, run both on the same instrument and timeframe. compare profit factor, max drawdown, and average trade — the breakeven stop variant often has a higher win rate but lower average winner, since some trades exit at break-even instead of hitting the full target.

backtest your custom session times over the last 6 months. validate that IB breakouts and retracements match what the data shows.