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Lessons › Module 2: Building a TPO Profile › Lesson 2.4

Lesson 2.4 · about 5 minutes

Initial Balance & Range Extension

ObjectiveAfter this lesson you can measure the Initial Balance range and range extension on both sides of the IB.

Concept

Lesson 1.4 introduced the Initial Balance (IB): the price range of the first hour, periods A and B together. This lesson is about measuring it. The IB range is the IB high minus the IB low. Range extension is any trade beyond the IB after period B. It can happen above the IB, below it, on both sides or not at all, so measure each side separately: up from the IB high and down from the IB low. Writing these numbers down lets you compare sessions: how wide the first hour was, and how far, and in which direction, the session later moved beyond it. They describe structure. They are not signals.

TPO profile from 97 to 107. A red bar marks the Initial Balance 100-105. Purple arrows show range extension of 2 points up to 107 and 3 points down to 97. A F G H I A B F H I A B E F I A B C E F A B C D E B C D E C D D F G H I G G H 107 106 105 104 103 102 101 100 99 98 97 IB high 105 IB low 100 range ext. +2 range ext. -3 XYZ (hypothetical): range extension on both sides of the IB Hypothetical data · red = Initial Balance (A+B) · purple = range extension
XYZ (hypothetical): range extension on both sides of the IB. Hypothetical, synthetic data generated from code. TPO profile from 97 to 107. A red bar marks the Initial Balance 100-105. Purple arrows show range extension of 2 points up to 107 and 3 points down to 97.

Worked example

Hypothetical XYZ, nine periods. A trades 100–104 and B trades 101–105, so the IB is 100–105 and the IB range is 5 points. C reaches 106 and D reaches 107: range extension of 2 points above the IB high. Later, F trades down to 99, below the IB low of 100, and G reaches 97: range extension of 3 points below. H and I trade back between 98 and 102. The session range is 97–107, 10 points, twice the IB range. Both sides of the IB were extended, at different times of the day.

Key takeaway

IB = the A+B range. Measure range extension separately above the IB high and below the IB low.

Check yourself

Pick an answer to see instantly why it is right or wrong.

Question 1 of 3

Period A trades 100–104 and period B trades 101–105. What is the IB range?

Question 2 of 3

In the XYZ example, how far did range extension go below the IB?

Question 3 of 3

Which statement about range extension is accurate?

Not financial advice. Educational content only, not financial advice. All tickers and prices are hypothetical, synthetic data. Market Profile is an organizing tool, not a trading system or a prediction. Trading involves substantial risk of loss.