summary: how to trade edgeful's A+ initial balance breakout setup — a time-based continuation trade that stacks the IB report, IB by rejection, the closing zone, opening candle continuation, IB by rejection retracement, and IB by levels to pick a side, confirm bias, size the stop, and set data-backed targets.
what it is
the IB breakout setup is a continuation trade built entirely in the first hour of the session. the initial balance (IB) is just the high and low of that first hour, so unlike the ultimate bullish or reversal setups — which need price to open a certain way relative to yesterday's range — this one is time-based. it sets up almost every single day, on every ticker, because the first hour always happens.
the whole setup comes together in the same window: the IB, the opening candle, and the IB by rejection read all form inside that first hour. that's what makes it so repeatable. edgeful runs it on NQ in the NY session, but because it's time-based, the same mechanics carry to ES, YM, GC, any futures ticker, and to stocks, forex, and crypto — just confirm the reads for the ticker and session you actually trade.
prefer to watch first? André walks through the entire setup from the IB report to data-backed targets here:
the reports involved
you're stacking a few reports, each answering a different part of the trade:
initial balance (standard) — the foundation. it measures how often price breaks one side of the first-hour range: a single break (one side only), a double break (both sides), or no break. most days are a single break, which is why you're trading the break rather than fading it.
IB by rejection — the side. it looks at which side of the IB forms first. when the low forms first, price leans toward breaking the high; when the high forms first, it leans toward breaking the low.
the closing zone (IB ending zone) — a customization on IB by rejection that filters for where price sat at the end of the first hour. the retracement levels cut the IB into quarters, and filtering for the zone price closed in sharpens the read a lot.
opening candle continuation — the day bias. it compares the price at the end of the first hour to the price at the open: a green opening candle (higher) leans the day toward closing green, a red one leans it toward closing red.
IB by rejection retracement — the stop. it takes the same formation-order bias and measures how deep price typically pulls back from the 10:30 close before the expected break, on the days that bias played out. that pullback depth is what turns your stop into a level the data supports instead of a guess.
IB by levels — the targets. it plots extensions of the IB range (a fraction of the first-hour range projected past the break) and tells you how often price reaches each one.
open each report for your ticker, session, and window to read the current rates before you lean on the setup.
the sequence
trade it in order — each step has to confirm before the next matters:
let the initial balance form. wait for the full first hour (9:30–10:30 ET on the NY session). the IB standard report tells you price almost always breaks one side — so you're planning to trade a break, not guess at chop.
pick the side with IB by rejection. check which side formed first. low-first leans toward the high breaking; high-first leans toward the low. this is your first read on direction.
sharpen it with the closing zone. filter IB by rejection for the quarter of the range price closed in. if price closed near the extreme in the direction of the likely break, the read gets much stronger. if it closed mid-range, the direction is more of a toss-up — that's your cue to lean on the next report or stand aside.
confirm the bias with opening candle continuation. a green opening candle supports the long side, a red one supports the short side. when the rejection read and the opening candle agree, that's your confluence — two or three reports pointing the same way, not one data point in isolation.
entry and stop
once the reports agree on a direction, there are two common ways in (using a long as the example — mirror them for a short):
enter at the 25% mark of the IB, stop at the 50% mark. tighter stop, roughly 1:1 to the opposite side, and you get filled more often.
enter at the 50% mark, stop at the IB low. wider stop, you get in less often, but there's more room for the trade to work.
IB by rejection retracement tells you which of those two stops the data actually supports: it measures how deep price pulls back from the 10:30 close before the break, counting only the days the rejection bias played out. if pullbacks rarely reach the 50% mark, the tighter option-1 stop holds up; if they often run to 50% or deeper, lean on the wider option-2 stop or wait for a better entry.
you can trade this mechanically — same entry and stop every day — or layer in your own confluence at the entry: VWAP, volume profile, fair value gaps, order blocks, or the previous day's levels. that's where your own style comes in. the report data defines the edge; how you filter and enter is yours to make consistent.
setting data-backed targets
the first major target is the opposite side of the IB — the measured move the break implies.
past that, use IB by levels for the extensions. one important customization: filter the report to breakout days only, not all days — otherwise you're counting double-break and opposite-direction days that don't reflect a clean single break. the report then shows how often price reaches each extension of the range, so you can place targets at levels the data actually supports instead of an arbitrary risk-to-reward number.
a common approach: take the bulk of your profit into the nearer extensions where price reaches most often, then trail runners toward the further ones. you don't need a giant move for the setup to be worth trading.
fitting it into your daily routine
because it's time-based, the IB setup forms every day — but not every day is A+. two tools tell you when to push and when to sit on your hands:
what's in play feeds live data through the reports and surfaces when the IB stack (and everything else) is lining up on your tickers right now. keep it open on a chart during the session.
the screener gives you the market's broader bias by running the heaviest ES and NQ names through several reports. when it's split roughly down the middle, that's a choppy, sit-on-your-hands day. when it's heavily one-sided, that supports pushing in that direction.
over a week or two, the discover tool is worth a scan too — it ranks every report's current setups by a quality score, so you can see which reports are coming into play and which are fading as the market shifts.
viewing it on your chart
the initial balance, the opening candle, the retracement (quarter) levels, and the IB extension levels all have TradingView indicators that plot automatically — plus a dashboard overlay and the what's in play summary right on your chart. there's no need to hand-plot any of these. see the indicator access article to get them set up.
tips
it's a sequence, not a checklist you read all at once — the break, the side, the closing zone, and the opening candle each have to line up.
A+ setups still fail. that's why you take small, controlled trades and let the edge play out over many trades rather than sizing up on any single one.
a headline or catalyst can override the data on any given day — that's normal, and it's outside what the reports measure.
the bearish version is the mirror: high forms first, red opening candle, break of the IB low, targeting the downside extensions.
short on time? every report here is customizable by time, so you can run the setup on a 30- or 15-minute IB instead of the full first hour — the reads all shift to match.
reports drift as markets change, so confirm each step's current read for your ticker and session before you lean on it.