medium · Volume Profile Analysis auction-market-theory
A session exhibits a 'Neutral-Extreme' day type. Price breaks the Initial Balance (IB) high, then reverses to break the IB low, and finally closes near the session low.
What is the primary implication for the next session?
- The IB range will act as a permanent support/resistance zone for the week.
- High probability of directional continuation in the direction of the close.
- Volume will likely drop as the market becomes 'exhausted'.
- Expectation of immediate mean reversion to the session midpoint.
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