Initial Balance - Trading Glossary

The price range during the first two periods from the open. The actual definition is far less im-portant than the concept; when the initial balance of the trading range is narrow (reading from high to low) we are more likely to see “range extension”. A wider initial balance will be more stable and better able to contain price.

Some days have no initial balance as the market begins to trend immediately from the opening range with constant range extension. Example of wide initial balance that market could not move above and resulted in reversals.

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