summary: the IB 75 setup is a pullback trade on the initial balance for the rare days the first hour closes right back on the side that formed first. that one condition flips the usual IB by rejection read — here's the condition, how to pull the data behind it, where the entry, stop, and target go, the VWAP filter that goes with it, and why the small sample matters.
what it is
most days, the initial balance (IB) resolves the way IB by rejection says it will: the side that forms first in the first hour tends to hold, and the opposite side is the one that breaks. that's the IB breakout setup, and it's the everyday version of this trade.
the IB 75 setup is the exception to it. on the small number of days where price spends the first hour travelling the other way and closes at 10:30 ET right back on the side that formed first, the read flips: price tends to go on and break the level that formed first instead of rejecting off it. IB 75 trades that flip with a resting limit order on the pullback — a quarter of the range back inside the IB.
it is not an everyday setup. it's rare, which is exactly why it's worth having the rules written down before it appears.
Dan Cooke, a funded trader in the edgeful community, walks through how he trades it here:
the one condition: where price closes at 10:30
everything hinges on where price sits when the first hour ends. the ending zone customization on IB by rejection cuts the IB into quarters and filters the sample by the quarter price closed in.
the part that trips people up: the ending zone is always anchored to the rejection side, not to the chart. the bottom quarter is always the side opposite the one that formed first, and the top quarter is always the side that formed first — whichever way the range actually formed. if the high formed first, the top quarter is the top of the IB; if the low formed first, it's the bottom of it. see which IB report should I use? for the full explanation of the filter.
the condition for IB 75 is simply this: the 10:30 ET close lands in the top (75–100%) zone — price came back to the level that formed first. no close in that zone, no setup.
what the data says
start with the baseline, unfiltered. IB by rejection says the same thing on NQ and ES: when one side of the range forms first, it's usually the opposite side that breaks. that's the normal rejection read, and it's the whole reason the IB breakout setup works.
flip it around and you have the number that matters here: on a normal day, price breaking toward the side that formed first is the least likely of the outcomes.
now filter for a 10:30 close in the top zone and it inverts. on both tickers, a clear majority of those sessions broke toward the level that formed first — the opposite of what the unfiltered report expects. that's the flip: the outcome that's least likely on a normal day becomes the expected one once the close lands back on the first-formed side.
pull both reads for your own ticker before you lean on this — the unfiltered rejection rate, then the same rate filtered to the top ending zone. the gap between the two is the edge, and it's much more informative than either number on its own.
one sensitivity check worth running: run the reads on wick breakout criteria, then switch it to close and the filtered read moves a little but the effect survives — which is what you want to see from a small sample.
how often it actually shows up
because the ending zone is anchored to the rejection side, most days drift away from the first-formed extreme rather than back to it. the bottom zone takes the largest share of sessions by some distance, and the top zone — the one this setup needs — is the rarest of the four by a wide margin.
so the qualifying day isn't a filter that throws away a big sample — the sample is genuinely that small. check the occurrence count on the filtered report before you plan around it, and expect this to be a setup you wait on.
the trade
long version — the high formed first, and price closes back in the top quarter:
entry: a resting limit order at the 75% level — a quarter of the range below the IB high.
stop: under the IB 50 (the midpoint of the range).
target: the IB high — the level that formed first.
short version — the low formed first, and price closes back in the bottom quarter: the mirror. limit a quarter of the range above the IB low, stop above the IB 50, target the IB low.
one naming note, because it matters when you place the order: the "75" is the pullback depth in the report's zone terms. that's the 75% price level only on the long version. on the short version the same pullback sits at the 25% price level. easiest way to hold it: enter a quarter of the range inside the first-formed extreme, stop past the midpoint, target that extreme.
from the 75% level to the extreme is a quarter of the range, and from the 75% level to the midpoint is the same quarter — so before any buffer on the stop, this is roughly a one-to-one trade. if you want to hold runners past the level, use IB by levels filtered to breakout days only for the extension targets.
the VWAP filter
Dan adds one discretionary filter: he skips a qualifying setup when the daily VWAP sits in the path of the trade, between his entry and his target. in his words — "I don't like fighting VWAP. I just don't like doing it."
he accepts that this costs him some winners. that's the trade-off with any discretionary filter, and it's a reasonable one as long as you apply it the same way every time. the VWAP suite indicator plots the level you need for this check.
when there's no trade
the first hour doesn't close in the top zone. this is the overwhelming majority of days.
price never comes back to the level. it's a limit order — no fill, no trade, and that's the setup working as intended.
the daily VWAP sits between the entry and the target.
what this is, and what it isn't
the filtered sample is small. check the occurrence count on the filtered report for your ticker. it will be small. that deserves to be treated like a small sample — it's a bias indicator, not proof.
it's not a complete entry system. it tells you which way the day leans when the condition hits — you still bring your own execution and risk rules.
it was tested on NQ and ES in the NY session. that doesn't automatically carry to other tickers or sessions. run the report on what you actually trade.
reads drift. re-run the report monthly rather than trusting a number you read once.
verify it on your own ticker
open the IB by rejection report for your ticker and session, all days, and read the baseline — how often the first-formed side gets rejected.
apply the ending zone customization and filter to the top zone. compare that read to the baseline.
check the sample size that survives the filter. it will be small, and that's the honest constraint on the setup.
from there it's a daily habit: note where price closes at 10:30 ET, and refresh the report monthly as conditions shift.
on the edgeful API, this is the ib_ending_zone parameter on initial-balance-breakout-by-rejection: zero for all days, four for the top zone.
viewing it on your chart
nothing here needs hand-plotting. the IB and its quarter (retracement) levels — including the 75% level and the IB 50 — plot automatically with the TradingView indicators, and the VWAP suite plots the daily VWAP for the filter. see the indicator access article to get them set up.
tips
IB 75 is the counter-case to the IB breakout setup, not a replacement for it. most days still favor the break of the opposite side — this is the exception you trade when the close tells you it's the exception.
the IB levels are fixed once 10:30 passes. the high, the low, the midpoint, and the quarters don't move for the rest of the session.
write the rules down before the day it appears. a once-a-month setup is one you'll otherwise improvise, and improvising is where the edge goes.
a headline or catalyst can override the data on any given day. that's normal, and it's outside what the reports measure.