This script visually represents the initial balance (IB) for three major trading sessions: New York, London, and Tokyo. The IB is determined based on the high and low established in the first hour of each session. The script also allows for extensions of these lines throughout the day to serve as potential support and resistance points.
Trading the Initial Balance:
IB Breakout: If price breaks and holds above the initial balance high, this can be viewed as bullish and a potential buy signal. Conversely, if the price breaks and holds below the initial balance low, it can be seen as bearish, indicating potential selling opportunities.
IB as Support/Resistance: The high and low of the IB often act as support and resistance levels. Traders can look for bounce-backs or reversals when the price approaches these levels later in the session.
Mid-Point: The midpoint of the IB (average of the high and low) can also act as a potential pivot or decision point. Prices holding above this midpoint might indicate strength, while prices below could suggest weakness.
Extensions: Extended lines can help traders project potential targets or areas of interest later in the session. For instance, if price breaks out of the IB, the extended line might serve as a target or a new support/resistance level.
Context is Key: While the IB can be a useful tool, it's essential to use it in conjunction with other technical analysis methods and indicators. The overall market context, such as trend direction and strength, should always be considered.
Timeframes: Different timeframes can offer different perspectives. While this script focuses on the 1-minute, 5-minute, 15-minute, and 30-minute charts, the principles can be applied across various timeframes.
Risk Management: As with any trading strategy, it's crucial to have a well-defined risk management plan. Set stop-loss levels and ensure you are comfortable with the potential loss before entering a trade.
Trading the Initial Balance:
IB Breakout: If price breaks and holds above the initial balance high, this can be viewed as bullish and a potential buy signal. Conversely, if the price breaks and holds below the initial balance low, it can be seen as bearish, indicating potential selling opportunities.
IB as Support/Resistance: The high and low of the IB often act as support and resistance levels. Traders can look for bounce-backs or reversals when the price approaches these levels later in the session.
Mid-Point: The midpoint of the IB (average of the high and low) can also act as a potential pivot or decision point. Prices holding above this midpoint might indicate strength, while prices below could suggest weakness.
Extensions: Extended lines can help traders project potential targets or areas of interest later in the session. For instance, if price breaks out of the IB, the extended line might serve as a target or a new support/resistance level.
Context is Key: While the IB can be a useful tool, it's essential to use it in conjunction with other technical analysis methods and indicators. The overall market context, such as trend direction and strength, should always be considered.
Timeframes: Different timeframes can offer different perspectives. While this script focuses on the 1-minute, 5-minute, 15-minute, and 30-minute charts, the principles can be applied across various timeframes.
Risk Management: As with any trading strategy, it's crucial to have a well-defined risk management plan. Set stop-loss levels and ensure you are comfortable with the potential loss before entering a trade.
Notas de prensa:
Small fix to disable script on unsupported timeframes (1m 5m 15m 30m)
Notas de prensa:
Typo on default Tokyo hour offset it from correct time (on my chart)
Notas de prensa:
Fixed an issue where there was no discrepancy between a live and historic candle, leading to the IB being incorrectly placed on live candles
Notas de prensa:
Updated script to V5
Created a retest area with imbalances
Created a retest area with imbalances
Notas de prensa:
Slight text updates in settings to define which imbalance color the setting will change
Notas de prensa:
Added logic to stop the "feature" of the Initial balance printing if you refresh the chart during the post IB hour
Notas de prensa:
Added a lot of modifiable settings, such as disabling particular sessions, extending only the middle line, and added a vertical line at the start of the session for visual aesthetic
Notas de prensa:
Pushed back imbalance drawing by 1 candle to make it look cleaner
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Added session boxes, will save you from having to add your own separate session indicator, which are usually clunky, slow to load, and have way too much data bloat.
Notas de prensa:
Cleaned up the input settings for clarity on what changes what
Notas de prensa:
Fixed session extension to reflect actual hours not an arbitrary number, reorganized the settings tab
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Created an option that will change the times to match futures chart (COMEX)
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Created a drop down box to switch between forex, COMEX and CME broker types to set the initial balance hours to the correct time based on broker type
Notas de prensa:
Slight imbalance recoding, for future update
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Updated times to reflect new london session time
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Updated new york session times to reflect daylight changeover
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Made session times fully customisable for simplicity and user friendliness
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Refactored and greatly trimmed the script as it was no longer working with v5 of pinescript, i have also split off the session boxes into its own indicator
Notas de prensa:
Slight adjustment to parameters for consistency