Initial Balance Reactions: Plan Levels, Wait for Evidence, Control Exposure

Video: my trading strategy is boring, but it made me $100,000 in 2 months
Creator: Fit Mom Trader
Original Video: Watch the original video
Difficulty: Advanced

The Big Idea

A level is a place to observe a response, not an instruction to enter immediately. The source combines prepared references with two initial-balance ideas: a failed move outside the range and a pullback toward its midpoint. The useful discipline is to distinguish the map, the reaction, and the risk decision.

Prepare a Map With an If–Then Plan

The creator describes trading NQ and gold using levels prepared largely in advance. The map includes prior-day extremes, previous-week and previous-session volume-profile references, and higher-timeframe supply or demand areas. The purpose is to wait for a response at an area rather than chase movement between areas.

The source reports substantial prop-firm payouts and an approximate success rate for a favored setup. The supplied transcript does not contain an independently verifiable ledger or the complete population behind those figures. This guide treats them as reported experience, not a reproducible performance estimate.

The planning idea is conditional: if price reaches an upper reference and rejects, inspect a short; if it reaches a lower reference and responds strongly, inspect a long. That flexibility does not mean choosing a direction after seeing which move won. Record the required reaction and invalidation for each scenario beforehand.

Keep Historical Activity Separate From Pending Orders

A profile’s point of control is its highest-volume price row under the selected calculation. Value-area boundaries describe a chosen share of recorded activity. Their location depends on the feed, time window, row construction, and settings. They are historical measurements, not proof of remaining buy or sell orders.

The source builds the previous week from the futures session open to its close and separately marks a previous New York session. For the evening method, it describes using New York hours for NQ but the broader futures session for gold. Those are different reference windows and should remain separately labeled.

The demand-area example uses the previous candle’s body around a strong displacement. The claim that orders may remain is a hypothesis; OHLCV cannot confirm it. The companion script does not infer volume-profile levels or institutional inventory from a candle pattern. See TradingView’s profile calculation overview (paid link) for the role of source data and price rows.

The Initial Balance Is the First Completed Hour

For the New York framework, the source defines the initial balance as 9:30–10:30 in the Eastern trading clock. Its high, low, and midpoint become reference levels after completion. The midpoint is simply (high + low) / 2; it is not the same calculation as VWAP.

The first setup is a failed auction: price moves outside a completed boundary, cannot hold there, and returns inside. A low-side failure can motivate a long toward the midpoint; a high-side failure can motivate a short toward it. A boundary touch without a qualifying response is insufficient.

The other setup is trend continuation: after a directional initial period, a return toward the midpoint rejects and resumes toward the range extreme. The creator often looks for a nearby VWAP anchored at 9:30 as confluence. A midpoint and VWAP can coincide, but they need not.

The Midpoint Can Be Close Enough to Leave Little Room

The source places stops beyond local structure rather than choosing a fixed contract count first. For any futures example, convert the price distance using the actual contract’s point value. A ten-point move in one product does not represent the same dollars as a ten-point move in another.

Risk Capacity Is Not the Account’s Headline Size

The source illustrates a nominal $50,000 account with $2,000 of drawdown capacity, five losing days, and two losses per day. Dividing $2,000 by five gives $400 per day; dividing again by two gives $200 per planned loss. That arithmetic allocates the entire allowance and leaves no reserve for costs, slippage, or rule mechanics.

It is an example of budgeting backward, not a recommendation to use every dollar of the available limit. If a sizing calculation gives 6.8 indivisible contracts, rounding up increases planned risk. Round down if the budget is a ceiling, or evaluate a smaller contract; do not describe both directions of rounding as equivalent.

The creator uses daily lockout settings and identifies situations she avoids, including personal low-quality hours, flat conditions, low participation, and major announcements. Those preferences should be evaluated for the specific market and account rules. A lockout is a process control, not proof of positive expectancy.

The Evening Method Uses Another Range and Another Clock

The source also observes the first two hours after the evening futures reopening, then looks for a sweep or a breakout-and-retest. It labels later activity Tokyo and discusses a roughly 8 p.m. Eastern example. The actual conversion between Tokyo local time and Eastern time changes seasonally; the label must not become a permanent fixed-offset rule.

The important transferable idea is to complete a defined range, then distinguish rejection from acceptance outside it. The source includes a potential long that fails and another move that reaches a nearer R objective but not a farther profile objective. Those examples show why targets and failures belong in the record.

The code below deliberately implements only the New York initial-balance component. Evening range selection, historical profiles, supply/demand areas, news filters, and the creator’s broader discretion remain separate. Coding one clear component is more useful than pretending to reproduce the entire workflow.

Pine Script Indicator

//@version=6
// Guide: https://candlechasers.com/initial-balance-reaction-session-plan/
// Original educational approximation; no orders, fills or performance claims.
indicator("CC Initial Balance Reaction Map", overlay=true)
zone = input.string("America/New_York", "Session timezone")
valid = chart.is_standard and timeframe.isminutes and timeframe.multiplier <= 15 and 60 % timeframe.multiplier == 0
start = timestamp(zone, year(time, zone), month(time, zone), dayofmonth(time, zone), 9, 30)
finish = start + 60 * 60000
endSession = timestamp(zone, year(time, zone), month(time, zone), dayofmonth(time, zone), 16, 0)
window = time >= start and time < finish
var int ref = na
var int covered = 0
var float rh = na
var float rl = na
var float firstOpen = na
var float lastClose = na
var float pv = 0
var float vv = 0
var bool full = false
var bool failLongUsed = false
var bool failShortUsed = false
var bool contLongUsed = false
var bool contShortUsed = false
bool failLong = false
bool failShort = false
bool contLong = false
bool contShort = false
if valid and barstate.isconfirmed
    if time == start
        ref := start
        rh := high
        rl := low
        firstOpen := open
        lastClose := close
        covered := int(time_close - time)
        full := false
        pv := nz(volume) * hlc3
        vv := nz(volume)
        failLongUsed := false
        failShortUsed := false
        contLongUsed := false
        contShortUsed := false
    else if ref == start and time < endSession
        pv += nz(volume) * hlc3
        vv += nz(volume)
        if window
            rh := math.max(rh, high)
            rl := math.min(rl, low)
            lastClose := close
            covered += int(time_close - time)
    if ref == start and time >= finish and covered == 3600000
        full := true
    if full and ref == start and time >= finish and time_close <= endSession
        float mid = (rh + rl) / 2
        bool a = low < rl and close > rl
        bool b = high > rh and close < rh
        failLong := a and not b and not failLongUsed
        failShort := b and not a and not failShortUsed
        contLong := not a and not b and lastClose > firstOpen and low <= mid and close > mid and close > open and not contLongUsed
        contShort := not a and not b and lastClose < firstOpen and high >= mid and close < mid and close < open and not contShortUsed
        failLongUsed := failLongUsed or failLong
        failShortUsed := failShortUsed or failShort
        contLongUsed := contLongUsed or contLong
        contShortUsed := contShortUsed or contShort
plot(valid ? rh : na, "IB high: develops until 10:30", color=color.red, linewidth=2, style=plot.style_stepline)
plot(valid ? rl : na, "IB low: develops until 10:30", color=color.lime, linewidth=2, style=plot.style_stepline)
plot(valid ? (rh + rl) / 2 : na, "IB midpoint", color=color.orange, style=plot.style_stepline)
plot(valid and vv > 0 ? pv / vv : na, "09:30 anchored chart-bar VWAP", color=color.aqua, linewidth=2)
plotshape(failLong, "Low failed-auction context", shape.triangleup, location.belowbar, color.aqua)
plotshape(failShort, "High failed-auction context", shape.triangledown, location.abovebar, color.fuchsia)
plotshape(contLong or contShort, "Midpoint response: direction from IB open/close proxy", shape.diamond, location.abovebar, color.orange)
alertcondition(failLong or failShort or contLong or contShort, "IB response context", "CC: completed initial-balance response; manual profile, zone and execution checks required.")
var table status = table.new(position.top_right, 1, 2, bgcolor=color.new(color.black, 10))
if barstate.islast
    table.cell(status, 0, 0, not valid ? "Use standard 1/2/3/5/6/10/15 minute chart" : ref != start ? "Prior session context: waiting for 09:30" : not full ? "Building / incomplete IB: no markers" : "Completed IB | first response per type/direction", text_color=color.white)
    table.cell(status, 0, 1, zone + " | VWAP needs volume | no profile levels inferred", text_color=color.white)

What This Indicator Shows

The indicator plots a developing 9:30–10:30 high, low, and midpoint, then freezes them if the complete hour is observed. A chart-bar VWAP accumulates from 9:30 to 16:00 using available volume. Use standard one-, two-, three-, five-, six-, ten-, or fifteen-minute candles. The panel reports building or incomplete data, a completed IB, or retained prior-session context. Reclaim triangles and midpoint diamonds finalize only after 10:30 and before the session close.

The midpoint continuation direction uses the completed IB’s close relative to its open as our simple proxy, not the creator’s full trend judgment. There is one marker per type and direction per observed session. A candle sweeping both range boundaries is excluded, and boundary sweeps take precedence over midpoint markers. New-session capture resets the flags; prior levels persist as context without new-date signals.

What This Indicator Does Not Show

It does not recreate profile rows, higher-timeframe zones, evening sessions, prop-firm rules, contract sizing, or reported payouts. The VWAP is based on chart-bar typical price and available volume; it is not a reconstruction of every trade. Missing opening bars suppress completed-IB markers. Midpoint diamonds do not enforce VWAP proximity, which must be checked separately or added as a declared research filter.

Setup and Validation

Paste the complete script into TradingView’s Pine Editor, save it, and add it to a standard candlestick chart with enough history. Read the status panel and reference plots before expecting a marker. Check the specified chart interval and session inputs. For scripts with alert conditions, use Once Per Bar Close and recreate alerts after changing the code or its settings.

Validation status: Reviewed statically for source-versus-proxy distinctions, completed-bar timing, future-data use, persistent state, reference replacement, expiry, and visible output. This script has not been compiled or chart-tested in TradingView here. No performance or live-execution results are claimed. Use replay to inspect the described behavior; static review does not replace compilation and chart validation.

Research and Replay Lab

These are proposed learning experiments, not results established by the source. Change one main feature at a time, retain failures and missing opportunities, and reserve a later period for evaluation rather than repeatedly selecting settings from the same examples.

Does VWAP proximity add information?

For the same midpoint-response candidates, compare an unrestricted group with one requiring midpoint–VWAP distance at most 0.25 prior ATR. Keep the IB window, entry timing, invalidation, and costs fixed. Record how many eligible events the extra filter removes and evaluate outcomes per eligible session.

Which objective is actually reachable?

For failed-auction candidates, compare the midpoint with a separately recorded farther objective. Keep entry and invalidation constant. Record target touches, execution-sensitive bars, and actual fills if available; do not grant a later target using the earlier entry price after the fact.

How should risk rounding be handled?

For a fixed hypothetical money-risk ceiling, calculate whole-contract size with floor rounding across varied stop distances. Compare planned and realized risk including costs. A zero result means the chosen contract does not fit that budget, not permission to exceed it.

Check Your Understanding

Is the IB midpoint a VWAP? No. One uses range extremes; the other weights price by volume.

Can the final first-hour high be used at 10:00? No. The first hour is still forming.

Does a demand zone prove resting orders remain? No. That inference requires evidence beyond OHLCV.

What happens when 6.8 contracts are rounded up? Planned risk increases beyond the original calculation.

Does the code enforce every confluence? No. Profiles, zones, VWAP proximity, and broader context remain separate.

Final Takeaway

Prepare the references, wait for a defined response, and calculate risk from the executable plan. The initial balance provides structure without making outcomes certain. The next useful comparison is whether a particular confluence improves the full opportunity sample rather than just the selected winners.

Risk Disclosure

This material is educational and is not personalized financial, investment, or trading advice. Trading can cause substantial losses. Examples, source-reported results, and chart observations do not establish future performance. Hypothetical calculations depend on their assumptions and omit costs unless stated. Spread, fees, slippage, gaps, leverage, liquidity, financing, and contract terms can materially change outcomes. Indicators do not simulate broker execution or establish profitability. Options involve additional contract, expiry, exercise, and valuation risks. Evaluate any approach with appropriate data and realistic risk limits before considering live use.

This is an independent educational companion and is not affiliated with, sponsored by, endorsed by, or authorized by the source creator, channel, or TradingView.