medium · Volume Profile Analysis auction-market-theory
A session's Initial Balance on NQ spans 20,400 to 20,460 (60 points). The prior day's range was 200 points. A Market Profile analyst describes the IB as 'narrow relative to the prior day's range.'
What day-type outcome does a narrow IB most strongly foreshadow?
- Non-Trend day — narrow IBs produce small, choppy ranges that stay inside the IB
- Trend day — a narrow IB concentrates early participation and sets up a large directional extension
- Normal Variation day — the market needs more time to form a wide IB before extending
- Neutral day — price will probe both sides of the IB equally before returning to center
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