Lesson 2 of 2 · 2 min
Initial balance
The first hour's range, how traders reference it, and what range extension can tell you.
The first part of the US session sets references that many participants watch for the rest of the day.
Definition
- Initial balance (IB) — the high and low of the first hour of the regular session (the first two 30-minute TPO periods). For index futures that means 9:30–10:30 am ET.
- Opening range (OR) — the high and low of a shorter opening window, such as the first 5, 15 or 30 minutes.
Why the first hour matters
The open is where overnight positioning meets the cash-market crowd. The IB captures the first attempt to find two-sided trade for the day, and is often built mostly by day-timeframe participants.
Range extension
When price trades beyond the IB, the day is extending. Extension is often linked to other-timeframe activity — participants with bigger agendas than the morning range.
- Narrow IB — leaves room for extension; more trend-like days are possible.
- Wide IB — often already contains much of the day's range; more rotational days are common.
Key Insight
IB width is context, not a signal. Compare today's IB to recent IBs rather than to a fixed number of points — ES and NQ ranges change with volatility.
Trading implication
Mark the IB and opening range every session, along with the overnight high/low and prior value. Whether price accepts or rejects the areas outside those references is one of the first reads of the day.
Continuing marks this lesson complete. Your progress stays in this browser.