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Volume-Confirmed IB Extensioninitial balance range extension

Evidence: ModerateProfessionalAuction · Session Breakout

The initial balance is the high-low range of a session's first hour — that session's first two-sided auction.

A range extension is a close outside it. A one-sided extension means the auction is having to search further for business.

The volume gate is the entire content of this setup. Closing outside the initial balance is easy and can happen on drift alone. What makes an extension meaningful is new participants arriving at that price, and the observable evidence for that is an expansion in volume.

Category
Auction · Session Breakout
Timeframe
M15 primary · M5 for a faster IB variant
Suitable pairs
EURUSD · GBPUSD · XAUUSD · index CFDs / futures
Session
The London open at 07:00 GMT or the New York open at 13:30 GMT
Indicators / tools
The initial balance box · tick volume against its 12-bar average · ATR(14)

Valid setup

S70 · VOLUME-CONFIRMED INITIAL BALANCE EXTENSION — VALID SETUP EURUSD · M15 · an extension without volume is a drift; the volume gate is the whole filter LONG 1.0782 1.0807 1.0833 1.0858 1.0883 1.0908 1.0934 INITIAL BALANCE WINDOW INITIAL BALANCE IB HIGH — extension trigger IB LOW ENTRY on the close above IB high SL back inside the IB (mid) TP1 = IB high + 1 × IB width TP2 = IB high + 2 × IB width 1R +2R 1 2 3 4 5 6 ① First hour: both sides quote, the session finds a range ② IB HIGH and IB LOW are fixed here and never move again ③ Range extension: CLOSE above IB high on volume ABOVE its 12-bar average. Volume is the part most people skip — an extension on falling volume is not an extension. ④ Entry ⑤ One-sided day: the IB low is never revisited ⑥ Targets are projections of the IB width, because the IB is the session's own measure of how far it searches. 1.0877 1.0849 1.0823 1.0821 1.0806 1.0793 IB fixed extension Tick volume vs 12-bar average — extension must be paid for avg 12

Exact rules

Entry

  • Define the initial balance window — London 07:00–08:00 GMT or New York 13:30–14:30 GMT. Document it in broker server time.
  • Lock the initial balance high and low. They are fixed for the rest of the session.
  • Trigger: an M15 close above the initial balance high, or below its low.
  • Volume gate: the extension bar's tick volume must be at least 1.3 × its own 12-bar average.
  • Enter at the next bar's open. OCO — cancel the order on the other side.

Stop loss

  • Back inside the initial balance, roughly at its midpoint — the high minus 0.55 × its width.
  • If price comes back deep inside the range, the extension has been rejected and the session is balanced.
  • Risk 0.5% per trade.

Take profit / exit

  • TP1 = the initial balance high plus one times its width.
  • TP2 = the initial balance high plus twice its width.
  • Time exit at the session close. This setup is session-bound.

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Trading carries risk and most retail accounts lose money. Nothing on this page is financial advice or a recommendation to trade. The chart is an illustration of the rules on constructed candles — it is not a record of a trade and not a backtest.