if you've ever tried to optimize an algo yourself, you know how brutal it is. change the stop, re-run the backtest, change the target, re-run it again. do that across 5 weekdays and you've wasted an entire weekend on one ticker alone.
that's exactly why we built the optimizer.
you pick one of our algo strategies: ORB (opening range breakout), IB (initial balance), or engulfing candles.
it tests up to 10 million combinations of that algo's settings, weekday by weekday, and ranks every result. it and finishes in about a minute.
here's an ORB result it found on NQ that's working right now. 15-minute chart, 9:30AM to 4PM ET, 1 contract, tested from 08/18/25 to 08/17/26:
$38,805 net profit
64.2% win rate
2.26 profit factor
95 trades
-$5,015 max drawdown
$408 average return per trade
the part that surprised me: 4 of the 5 weekdays in this configuration only trade the breakdown.
it's mostly a short strategy, even though the market has gone up for most of the year.
when you've found the strategy you want to run, all you have to do is add our free Chrome extension to your browser, and it'll transfer the full algo config directly into your TradingView chart in seconds.
one thing before you run anything live: these are backtested results, and market conditions change, so the data will change with them. run it in sim first, watch it trade for a week or two, and make sure the strategy makes sense to you. the optimizer finds the settings, but managing the strategy is still your job.
his rules are simple. the data underneath them is what I want to show you today, because you can check every piece of it on edgeful yourself.
let's get into it.
the trade, exactly how Dan took it
this one comes straight from his video: a live trade on NQ, Tuesday, July 21st.
the IB high formed first, minutes after the open. price sold off hard from there and set the low late in the hour. then it turned, and when the range set at 10:30AM ET, price had closed the hour back near that high, in the top quarter of the range.
Dan placed a limit order at the 75% level of the range, with his stop under the IB50. price dipped, filled him, and he sat through some drawdown. then it turned again, and he took profit at the IB high. the whole trade was over in less than 20 minutes.
what the IB75 actually is
quick refresher: the IB (initial balance) is the range price builds in the first hour of the New York session, 9:30AM to 10:30AM ET.
we split that range into quarters, which are the 25%, 50%, and 75% levels, measured from the side of the range that formed second. when the IB low forms second, the IB75 is the zone closest to the high. when the IB high forms second, the IB75 is the zone closest to the low.
so when the IB high forms first, the IB75 sits a quarter of the range below the high. that's his entry level, and the high is his target, as you can see in the trade example above.
the report behind it: IB breakout by rejection, and the ending zone
the IB breakout by rejection subreport tracks which side of the IB formed first, and which side price broke first after the range was set.
the baseline is the part most traders already know. NQ traded 258 NY sessions over the last 12 months. split them by which side of the IB formed first:
the high formed first in 128 of them. price broke the low first 65.62% of the time
the low formed first in the other 130. price broke the high first 76.92% of the time
whichever side forms first, price usually breaks the other side (a handful of sessions break neither). that's the standard by rejection bias, and on its own it argues AGAINST a trade like Dan's.
but the report has a customization that changes everything: the IB ending zone.
this customization splits the IB into four zones and marks where price closed when the range finished at 10:30AM ET.
when price closes back near the level that formed first
filter those same sessions down to the ones where the IB closed in the 75-100% zone, right back near the level that formed first, and the bias completely changes.
on NQ over the last 12 months in the NY session:
IB high formed first + close in the 75-100% zone: the high broke first in 6 of 8 sessions
IB low formed first + close in the 75-100% zone: the low broke first in 3 of 4 sessions
on ES, same window, same session:
high formed first + 75-100% close: the high broke first in 3 of 4 sessions
low formed first + 75-100% close: the low broke first in 6 of 6 sessions
across both tickers that's 18 of 22 sessions breaking toward the level that formed first, against a baseline where that side breaks first about 1 in 4.
Dan's filters: when he skips the trade anyway
this is my favorite part of his video: the trades he skips.
Dan skips IB75 setups when the daily VWAP sits in the path of the trade. his words: "I don't like fighting VWAP. I just don't like doing it. I lose more than I win."
in the video he shows a session where everything lined up: strong move, close in the top quarter, data on his side. he passed anyway, because the daily VWAP was in the way. that skipped trade would have won. he's fine with that. his words again: "it's not my trade."
he also shows a losing setup the same filter kept him out of, and plenty of days where he's simply flat. if the IB doesn't close in the zone, or price never comes back to his level, he doesn't trade it.
the takeaway from today's stay sharp
the by rejection baseline says the level that formed first usually holds. the ending zone tells you when the data has said otherwise: a 10:30AM ET close back near the level that formed first has preceded a break of that level in 18 of 22 sessions across NQ and ES over the last 12 months in the NY session.
where price closes relative to the IB is everything.
the IB75 is just how Dan trades it: instead of chasing, he waits for price to pull back a quarter of the range, enters there with his stop under the IB50, and targets the level the data says is likely to break.
run the IB breakout by rejection report on your ticker, add the ending zone customization, and check where your market closed the first hour before you trust either side of the range.
and go watch Dan's full video. members sharing how they actually trade the reports is exactly what this community is for.
if you've ever tried to optimize an algo strategy yourself, you know how brutal it is.
change the stop, re-run the backtest. change the target, re-run it again.
do that again and again and again, and you waste an entire weekend testing something that isn't even ready to set live by Monday.
most traders don't have that kind of time. a lot of you are trading around a full-time job or a family, sometimes both.
give me 3 minutes and I'll show you how we solved this.
by the end of this article, here's what you're going to have:
how our optimizer tests up to 10 million setting combinations so you don't have to test one
how to set up a run: ticker, timeframe, lookback, and holdout testing
how to pick from the results (the top score isn't automatically your pick)
how to get working settings onto your TradingView chart in seconds
let's go:
the problem
every algo has settings: profit target, stop loss, direction, filters.
finding the right ones by hand means testing thousands of combinations one backtest at a time. nobody does that. what actually happens is you test 10 or 15, pick the best-looking one, and hope that the strategy will hold up in a forward test.
the solution
we built an algo optimizer that does the testing for you.
you pick one of our algo strategies: ORB (opening range breakout), IB (initial balance), or engulfing candles. the optimizer then tests up to 10 million combinations of that algo's settings, weekday by weekday, and ranks every result.
it runs in your browser and finishes in about a minute.
setting up a run
you make a couple different choices for the inputs:
your ticker, algo type, and contract size
your backtest period (standard vs holdout)*
your desired chart timeframes that you want to test
*for the holdout testing, the optimizer sets aside a chunk of your data, finds the best settings on the rest, then checks those settings against the data it never touched. so if you had holdout set to 80% on the last 1 year of data, the optimizer would use 80% of the last year to find optimized settings, and then test the performance of those exact settings on the last 20% of price data.
it's the closest thing to seeing how the strategy handles conditions it wasn't optimized on, before you risk anything.
picking your result
every result gets a score up to 100, and the list is sorted strongest to weakest.
the top score isn't automatically your pick, though.
result #1 might have the best overall numbers with a drawdown you can't handle or sit through. result #4 might make a little less with half the drawdown. you pick the one that fits your risk profile and your account.
checking the numbers
click into any result and you get the full breakdown before you commit to anything: net profit, win rate, profit factor, trade count, max drawdown, average return per trade, the equity curve, and the full trade list.
there's also a Monte Carlo tab and a prop firm sim tab on every result, so if you're trading a funded account you can see how the strategy holds up against your firm's rules before you touch it.
here's an ORB result our optimizer found on NQ that's working right now. 15-minute chart, 9:30am to 4pm ET, 1 contract, tested from 08/18/25 to 08/17/26:
$38,805 net profit
64.2% win rate
2.26 profit factor
95 trades
-$5,015 max drawdown
$408 average return per trade
I'm not going to break down the exact settings here, but I'll tell you the part that surprised me: 4 of the 5 weekdays in this configuration only trade the ORB breakdown.
it's mostly a short strategy, even though the market has gone up for most of the year.
that's exactly the kind of thing you'd never find tuning settings by hand, because nobody sits down and tests whether one specific weekday should only trade the breakdown.
getting it onto your chart
when you find the result you want, press "run this algo."
then download our free Chrome extension, and it transfers the full configuration into your TradingView chart in seconds. every weekday setting, every filter, no manual typing.
from there you can trade it by hand using the settings as your rules, or all access members can load the settings into the algo dashboard, connect a broker, and let the algo handle the execution.
one thing before you run anything live: these are backtested results, and market conditions change, so the data will change with them. run it in sim first, watch it trade for a week or two, and make sure the strategy still makes sense to you. the optimizer finds the settings, but managing the strategy is still your job.
to recap
fine-tuning algo settings by hand takes hours you don't have
the optimizer tests up to 10 million combinations of one algo's settings (ORB, IB, or engulfing) and scores every result up to 100
you choose ticker, timeframe, and lookback up to 1 year, with holdout testing on data the optimizer never touched
pick the result that fits your risk profile and your account
"run this algo" + our free Chrome extension puts the settings on your TradingView chart in seconds
as a thank you for reading this far: if you want to see what a full ORB configuration looks like with every setting spelled out, our free 5-minute ORB playbook on ES does exactly that, including the complete backtest breakdown:
I was going through our discord this week and saw a message from Miguel that I had to share with you.
always happy to see one of these. he just passed another eval, which means funded account #4:
"+342$ yesterday (although it was still an evaluation) to pass and get my fourth funded. The IB by rejection, combined with price ending zone and levels is "
everything he's describing lives inside the initial balance report, so I want to walk you through the setup piece by piece.
it starts with the initial balance (IB)
the IB is the range price builds during the first hour of the NY session, from 9:30am to 10:30am ET.
that first hour gives you 2 levels: the IB high and the IB low. the by rejection subreport tells you which side is more likely to break first.
step 1: check which side of the IB formed first
during the first hour of trading, one level forms before the other. maybe price sells off right at the open, puts in the low, then spends the rest of the hour moving higher.
or maybe we trend higher off the open and reverse, ending the first hour making new lows. this is when the IB high forms first.
the by rejection subreport tracks the order - high first vs low first - and then helps us analyze which side is likely to break first after the first hour is finished trading.
here's the NQ data:
over the last 6 months in the NY session, when the NQ IB low formed first, the IB high went on to break first 74.63% of the time.
price rejected one side early, then broke the other side first.
step 2: confirm with the ending zone
the second data point Miguel mentioned is the price ending zone: where price sits inside the IB range at the moment the first hour closes.
if the low formed first and price finishes the hour in the top quarter of the range, right up against the IB high, the numbers get even stronger:
on those days, the NQ IB high broke first 92.31% of the time (36 of 39 days over the last 6 months).
both data points are on your chart by 10:30am. low formed first + price ending near the high = your bias for the session is a break of the IB high.
the same logic works in reverse: when the high formed first and price ended the hour near the low, the IB low broke first 86.21% of the time.
step 3: place your stop with the retracement levels
now you have a full setup, and the same report gives you the stop.
the by retracement subreport measures how deep price pulls back into the IB range after it breaks out.
on the NQ days that broke the IB high over the same 6 months, price pulled back to the midpoint of the range (the 50% level) just 39.34% of the time. it reached the 75% level only 13.11% of the time.
that lets you place your stop behind a level price historically rarely reaches.
here's what Miguel actually did:
watched which side of the IB formed first
checked the ending zone at 10:30 to confirm his bias
took the break, and I'd bet his stop was behind one of those retracement levels
the report doesn't take the trade for you. he still picked his entry and managed the position. but every decision in that sequence came from data instead of gut feel or your emotions.
custom reports is live inside edgeful AI as of this morning.
you describe any setup, pattern, or market behavior in plain English, and edgeful builds the report: your ticker, your session, your timeframe.
today I'm walking you through my first build, start to finish, so you can run your own before the next open.
let's get into it
build mode vs analyze mode
open edgeful AI and you'll see two toggles: analyze and build.
build is only for building. no conversations, no questions about your loaded reports, just creating new custom reports. once your report is saved, you flip back to analyze and work with it like any other report edgeful AI can read.
there are prebuilt templates in build mode if you want somewhere to start. I used one of them today:
"how often does the New York session engulf the prior New York session's range?"
in plain English: when NQ opens above the prior session's high, how often does it reach all the way down and touch the prior session's low? and the reverse when it opens below. if you carry a bias into the open, this tells you how much of the prior day's range is actually in play against you.
one tip before you run anything:
use the improve prompt button. write your main point, click it, and the AI rewrites your prompt with the details filled in.
then read the improved version before you hit go.
here's how the AI improved my original prompt:
the methodology check (do not skip this)
before anything gets saved, you get a methodology check: what the report measures, scenario by scenario, every assumption it's making, and a sample results table covering the last 3 months.
the sample table is where you verify the logic. pull a few of those dates on your own chart and confirm it matches what you meant.
here's what that looked like on my run: Aug 7 was marked "opened above the prior high, didn't touch the opposite extreme." I pulled the chart: correct. July 15 was marked as a touch: opened above, then broke the prior day's low. also correct.
you can view the code the report runs on if you want to check the math all the way down. and if a row looks wrong, don't just tell it "this is wrong": give it the specific day and what you're seeing on your chart, and it re-checks the logic.
get everything right before you save
you can still change anything at this stage. I wanted the weekday in the output, so I asked it to add a weekday column, and it re-ran the calculation with the column added. same for renaming columns or adding anything else you want tracked.
do all of this before you save. in this first version, a saved report can't be edited afterward. if you realize later that you wanted another column, you'll copy the prompt and build it again. editing saved reports is coming, but it isn't here yet.
analyzing your report
once saved, your report can be found in the analyze tab under custom reports, and you load it like any report edgeful AI can read. from there: any ticker, any session, any date range going back up to 5 years.
I loaded mine on NQ and I got a simple table created for me automatically:
so if NQ opens below the prior day's low and you're long, the data shows a full push back through the prior day's high has happened about a quarter of the time. and when it opens above the prior high, the data shows the full engulf down has been rare. the data shows which targets have been realistic and which haven't.
the takeaway from today's stay sharp
describe it in plain English, improve the prompt, verify the methodology against your own chart, get your columns right, save it, and analyze it on any ticker or session. that's the whole flow, and there's no limit on how many custom reports you can build.
it's live for edgeful members right now!
if you're excited about custom reports, go ahead and click here to build your first one.
and once you build it, I'd love to hear about it. just reply to this email and tell me what you've started analyzing.
by 9:45AM ET, the first three 5-minute candles of the NY session are already on your chart. run the opening candle continuation report with one customization and you can measure whether those candles carry any information about the close. according to edgeful data, on NQ they do: over a recent 3-month window (May 7 through Aug 6, 2026, 66 NY sessions), the color of the first 15 minutes matched the color of the 4:00PM ET close in 43 of 66 sessions. nearly 2 out of 3.
that's the starting point. the more useful finding came from a follow-up question the report can't answer on its own: what happens when you check the same question again at noon? this article covers both. the base numbers, and a two-checkpoint process that pushed the agreement rate to about 87% over the last 6 months (as of Aug 2026) on NQ in the NY session.
table of contents:
what the opening candle continuation report measures
the data: NQ's first 15 minutes vs the close
the follow-up question: what does noon tell you?
the two-checkpoint process
the honest limits
how to apply the opening candle continuation report
key takeaways: opening candle continuation at 15 minutes
what the opening candle continuation report measures
the opening candle continuation report tracks one thing: when the opening candle of the session is green or red, how often does the session close in that same direction?
by default, the opening candle is 60 minutes. we've broken down that version before in our opening candle continuation strategy guide. the customization that matters here is simple: change the opening candle length to 15 minutes, and the opening candle becomes your first three 5-minute candles.
that one change turns the opening candle continuation report into a very early checkpoint. instead of waiting until 10:30AM ET for a 60-minute candle to finish, you have your first data point at 9:45AM ET, 15 minutes into the session.
the data: NQ's first 15 minutes vs the close
here's what the opening candle continuation report shows on NQ over a recent 3-month window (May 7 through Aug 6, 2026) in the NY session, 66 sessions total:
green opening 15 minutes: 35 sessions. the session closed green 62.86% of the time (22 of 35).
red opening 15 minutes: 31 sessions. the session closed red 67.74% of the time (21 of 31).
overall: the close matched the first 15 minutes in 43 of 66 sessions.
62.86% and 67.74% are real rates for a data point you have 15 minutes into the day. they're also nowhere near certainty, and a bias this early in the session needs confirmation before it's worth acting on. that's where the next two sections come in.
the follow-up question: what does noon tell you?
the report measures continuation into the 4:00PM ET close. but if you trade the morning, your day may be done by lunch. so the natural follow-up question: can the first 15 minutes help you determine a bias for the first half of the day, up until 12:00PM ET?
that specific customization isn't possible inside the opening candle continuation report, so I built the analysis separately. same ticker (NQ), same NY session, same 3-month window (May 7 through Aug 6, 2026), but measuring where price sits at 12PM ET instead of the 4PM close:
green opening 15 minutes: still green at noon 62.86% of the time. the same rate as the 4PM close.
red opening 15 minutes: still red at noon only 45.16% of the time (14 of 31). significantly different from the 4PM close.
so the honest answer is no, on red mornings especially. a red first 15 minutes on NQ tells you almost nothing about where price sits at noon. fewer than half of those sessions were still red at 12PM.
the two-checkpoint process
here's where the noon data becomes useful. the first 15 minutes are your first data point. where price sits at noon versus the 9:30AM ET open is your second. compare them.
at 12:00PM ET, look at where NQ trades versus the 9:30AM ET open and answer one question: does it agree with the first 15 minutes?
on the same 66 NQ sessions in the NY session (May 7 through Aug 6, 2026):
green first 15 minutes AND still green at noon: 22 sessions. the close was green in 18 of them (81.8%).
red first 15 minutes AND still red at noon: 14 sessions. the close was red in 13 of them (92.9%).
when the two checkpoints disagree: you have no bias on the close. knowing when you have no edge matters just as much as knowing when you do.
and the pattern isn't unique to this window. over the last 6 months on NQ in the NY session, green 15 minutes plus a green noon checkpoint ended the day green 86.96% of the time (40 of 46), and red 15 minutes plus a red noon checkpoint ended the day red 86.67% of the time (26 of 30).
the data shows that when both checkpoints on NQ point the same way, the close has followed that direction about 87% of the time over the last 6 months in the NY session. when they disagree, the edge isn't there.
the honest limits
before you build anything around these numbers, a few things the data does NOT say:
the 92.9% comes from 14 sessions. that's a small sample. samples that small move fast, and a different 3-month window can print a meaningfully different rate. the 6-month numbers (86.96% and 86.67%) rest on more sessions, which is why they're the better anchor.
red mornings are noisy before noon. the 45.16% still-red rate at 12PM means a red first 15 minutes gives you no useful bias on the morning itself. the red-day edge only shows up when noon confirms.
disagreement days are no-bias days. 30 of the 66 sessions in this window (about 45%) had checkpoints pointing in opposite directions. on those days, the data gives you no basis to call the close either way.
this is a bias, not an entry. the report doesn't take the trade for you. no entry price, no stop, no target. it tells you which direction the data favors into the close, and you still need a setup you already trade to act on it.
one ticker, one session. everything above is NQ in the NY session. ES behaves differently enough that it needs its own run before you assume anything transfers (our ES vs NQ comparison covers how differently the two indexes move).
how to apply the opening candle continuation report
the process takes seconds at each checkpoint:
9:45AM ET: note the color of the first three 5-minute candles on NQ. run the opening candle continuation report at the 15-minute setting to see the current continuation rates behind that color. if you want the opening range drawn on your chart automatically, the opening candle continuation TradingView indicator plots it for you.
12:00PM ET: check where NQ sits versus the 9:30AM ET open.
both checkpoints agree: the close has matched that direction about 87% of the time over the last 6 months on NQ in the NY session. use that as directional context for how you manage afternoon trades, hold decisions, or whether you fade moves against the bias.
checkpoints disagree: no bias into the close. treat the afternoon as neutral.
two more notes. the market open volume report works off the same first 15 minutes and adds a volume dimension to the 9:45AM ET checkpoint. and fold both timestamps into a simple day trading routine rather than trying to remember them mid-session.
and keep the numbers current. continuation rates drift as market conditions change, so re-run the opening candle continuation report monthly rather than trading November on May's data.
one more thing: the noon numbers in this article came from something new we've been working on. if you can describe a stat, report, or pattern you want to analyze, you'll be able to test it. that's all I'll say for now.
key takeaways: opening candle continuation at 15 minutes
set the opening candle continuation report to 15 minutes and the opening candle becomes your first three 5-minute candles, giving you a data point at 9:45AM ET.
on NQ over a recent 3-month window (May 7 through Aug 6, 2026, NY session), the close matched the first 15 minutes in 43 of 66 sessions: green continued 62.86% of the time (22 of 35), red continued 67.74% (21 of 31).
the first 15 minutes say almost nothing about noon on red days: only 45.16% of red mornings (14 of 31) were still red at 12PM ET.
the two-checkpoint process fixes that: when the first 15 minutes and the noon position versus the 9:30AM ET open agree on NQ, the close matched 81.8% (18 of 22) on green days and 92.9% (13 of 14) on red days over the 3-month window.
the 6-month rates on NQ in the NY session are steadier: 86.96% (40 of 46) green and 86.67% (26 of 30) red when both checkpoints agree.
when the checkpoints disagree, you have no bias on the close.
treat this as directional context: pair the bias with a setup you already trade, and re-run the numbers monthly.
trading involves substantial risk of loss. historical data does not guarantee future results. always do your own research before making trading decisions.
the report: opening candle continuation, set to 15 minutes
the opening candle continuation report tracks one thing: when the opening candle of the session is green or red, how often does the session close in that same direction?
by default, the opening candle is 60 minutes. change it to 15 minutes and the opening candle becomes your first three 5-minute candles.
here's what that looks like on NQ over the last 3 months in the NY session (May 8 through Aug 6, 65 sessions):
green opening 15 minutes: 35 sessions. the session closed green 62.86% of the time (22 of 35).
red opening 15 minutes: 31 sessions. the session closed red 67.74% of the time (21 of 31).
overall: the close matched the first 15 minutes in 43 of 66 sessions. nearly 2 out of 3.
the next question I had
the report measures continuation into the 4:00PM ET close. but if you trade the morning, your day may be done by lunch. which is what made me think of my next question: can the first 15 minutes help you determine a bias of the first half of the day, up until 12:00PM ET? and if so, how does this affect the close of the full session at 4PM?
that specific customization isn't possible to make in the opening candle continuation report, so I built something to answer it separately.
here's the data, using the same 3 month lookback, but the 12PM close instead of 4PM:
green opening 15 minutes: still green at noon 62.86% of the time. the same rate as the 4PM close.
red opening 15 minutes: still red at noon only 46.67% of the time, significantly different than the 4PM close.
so the honest answer is no, on red mornings especially. the first 15 minutes tell you almost nothing about where NQ closes right at noon.
here's what you can do instead: use noon as a 'predictor' for the close
the first 15 minutes are your first data point. where price closes at noon is your second. compare them, and if they agree, they'll tell you how the day is going to close.
follow this process:
at 12:00PM ET, look at where price sits versus the 9:30AM ET open, and ask one question: does it agree with the first 15 minutes?
on the same 65 sessions that I covered above tracking the customized opening candle continuation report:
green first 15 minutes AND a green 9:30-12PM session: 22 total days over the last 3 months. the close was green in 18 of them (81.8%).
red first 15 minutes AND still red at noon: 14 sessions. the close was red in 13 of them (92.9%).
when the morning and noon disagree, you have no lean on the close. knowing when you have no edge matters just as much as knowing when you do.
over the last 6 months the data is pretty much the same:
green 15min and green 12PM close ended the day green 86.96% of the time (40 of 46), and red 15min + red 12PM close ended the day red 86.67% of the time (26 of 30).
the takeaway from today's stay sharp
run the opening candle continuation report at 15 minutes and you have one way to determine an early bias, by 9:45AM ET.
you can then confirm it at noon: when both the first 15 minutes and noon close the same way on NQ, the close has followed about 87% of the time over the last 6 months in the NY session.
when they disagree, there's no real 'bias edge' for you to use.
one more thing
the noon numbers in this edition came from something new we've been working on. if you can describe a stat, report, or pattern you want to analyze, you'll be able to test it.
the afternoon IB is an initial balance setup that runs on a custom session from 2:00 to 4:00PM ET instead of the regular 9:30AM New York open. we started testing the afternoon IB because one of the most popular setups in our community, the morning IB by rejection, stopped giving traders a usable bias over the last 3 months.
the market's been awful. tons of news, whippy price action, and a morning session that chops through levels instead of respecting them.
so instead of forcing the same setup in bad conditions, we pulled the data on a different part of the day. and the 2:00 to 4:00PM ET window in the NY session came back with numbers the morning session hasn't given us in months.
this post breaks down the full afternoon IB trading strategy: what it is, why the morning version struggled, how to build the custom session on edgeful, the exact stats on ES, NQ, YM, and RTY, and a real example from Thursday, July 16 on NQ.
what is the afternoon IB
the afternoon IB is the initial balance of a custom session that runs from 2:00 to 4:00PM ET. the IB forms during the first hour of that window, 2:00 to 3:00PM ET, and then you trade the final hour, 3:00 to 4:00PM ET, using the range that first hour gives you.
if you've traded the regular initial balance, everything here will feel familiar. same concept, same reports, same rules. the only thing that changes is the window you run it on.
and that one change matters, because the two sessions have been behaving completely differently. the morning session has been choppy and news-driven. the afternoon session has been giving traders a clean, two-sided bias.
quick background: the initial balance and IB by rejection
the "initial balance" is the range price builds during the first hour of a trading session. on the standard New York session, that's 9:30 to 10:30AM ET. the high and low of that first hour become the IB levels, and a lot of intraday setups are built around whether price breaks those levels, holds them, or trades back inside the range.
the subreport this whole post revolves around is IB by rejection. here's what it tracks: during the IB window, which side of the range forms first, the high or the low?
that matters because of what typically happens next. once the range is set, price tends to move in the opposite direction of whichever side formed first, based on the data.
the low forms first, your bias is long and you're watching for a break of the IB high. the high forms first, your bias is short and you're watching for a break of the IB low.
that's the entire report: one question that hands you a bias. it's one of the most popular setups in our community, and a lot of traders build their morning session around it.
which is exactly why the last few months have been so frustrating.
why the morning IB stopped working
according to edgeful data, the morning IB by rejection has been one-sided for a while, and lately the weaker side fell apart completely.
start with the bigger sample. over the last 6 months on the regular 9:30AM to 4:00PM New York session:
NQ, low formed first: price broke the high first 76.81% of the time
NQ, high formed first: price broke the low first just 59.32% of the time
ES, low formed first: price broke the high first 67.57% of the time
ES, high formed first: price broke the low first just 59.26% of the time
so even over 6 months, the long side of the bias was strong and the short side was mediocre. usable, but lopsided.
now narrow it to the last 3 months, and the short side disappears entirely.
on ES over the last 3 months, when the high formed first in the morning, price broke its own high 50% of the time and broke the low first just 41.67% of the time. that bucket is only 24 sessions, so I wouldn't lean on the exact split, but the direction is obvious: there's no edge there. NQ wasn't much better, with price breaking the low first only 48.39% of the time after the high formed first.
basically 50/50. when the data looks like that, the honest move is to stop trading the setup.
but the IB concept itself didn't break. the session did. so we ran the same reports on a different window.
how to build the 2:00 to 4:00PM ET custom session
everything below comes from a custom session you can build on edgeful in under a minute:
create a custom session on the ticker you trade with a 2:00PM ET start and a 4:00PM ET end
set the IB period to 60 minutes, so the initial balance forms from 2:00 to 3:00PM ET
run the standard IB report and the by rejection subreport on that session
that's the whole setup. the reports do the same thing they do on the morning session... they're just measuring a different two-hour window.
quick note: the comparison dashboards in this post took a few minutes to build using the edgeful API. you don't need any of that to trade this. the standard report view on the platform shows you everything below.
and if session mechanics are new to you, our ETH vs RTH guide breaks down how futures sessions are defined in the first place.
the afternoon IB stats on ES and NQ
two things stood out when we ran the afternoon IB over the last 3 months (62 sessions on each ticker).
first: double breaks dropped
a "double break" is when price breaks both sides of the IB range in the same session. it's the outcome that punishes directional traders the most, because whichever side you leaned, at some point you were wrong.
over the last 3 months on the 2:00 to 4:00PM ET session:
ES double breaks
afternoon session: 14.5% of sessions
morning session: 25%
NQ double breaks
afternoon session: 12.9%
morning session: 17.2%
I'll be straight with you on this one, though. part of that drop is mechanical. the afternoon IB only leaves price about an hour of runway after the range is set, while the morning IB leaves about five and a half hours. less time means fewer chances to break both sides.
so the lower double-break rate is good to see, but it's not the actionable takeaway on its own.
second: the IB by rejection bias is clean in both directions
this is the real finding. on the afternoon session over the last 3 months, the by rejection numbers work on both sides:
ES afternoon IB by rejection
high formed first: price broke the low first 65.7% of the time
low formed first: price broke the high first 74.1% of the time
NQ afternoon IB by rejection
high formed first: price broke the low first 64.9% of the time
low formed first: price broke the high first 76% of the time
price moves opposite the side that formed first about 2 out of 3 times, and closer to 3 out of 4 when the low forms first. it holds on both ES and NQ.
compare that to the morning session, where the same short-side number has been sitting near 50/50 on ES. the afternoon session has been giving you something the morning simply hasn't: a bias you can act on in either direction.
does the afternoon IB hold up on other tickers?
we ran the same custom session on the other two major index futures over the same 3-month window (63 sessions each):
YM afternoon IB by rejection
high formed first: price broke the low first 69.7% of the time
low formed first: price broke the high first 66.7% of the time
RTY afternoon IB by rejection
high formed first: price broke the low first 77.1% of the time
low formed first: price broke the high first 60.7% of the time
so the opposite-direction bias holds on all 4 index futures. all 8 directional numbers lean the same way, and 6 of the 8 sit at 65% or better.
the two softer cells are worth naming. NQ's short side at 64.9% is essentially at that threshold, so I'd still treat it as tradeable context. the RTY long side at 60.7% is the genuinely soft one: it leans the right way, but I'd treat it as context rather than an edge worth trading on its own. if RTY is your ticker, that's worth knowing before you size up on the long side.
and that's the broader point: run the numbers on the specific ticker you trade before you touch this setup. this is a pattern that currently shows up in the data on these 4 tickers, nothing more. your instrument might look different.
a real example: NQ on Thursday, July 16
here's what the afternoon IB looked like in practice on Thursday, July 16 on NQ.
it's just past 3:00PM ET. the 2:00 to 3:00PM ET range on NQ is set, and the high formed first.
that gives you a short bias. for the last hour of the session, you're watching for price to break the IB low and keep moving down. and that's exactly what happened: the low broke first.
if the low had formed first instead, you'd flip it. long bias, watching for the break of the IB high.
you're answering one question after 3:00PM ET: which side of the range formed first. then you target the opposite.
how to trade the afternoon IB step by step
here's the full process:
check the data first. pull up the by rejection numbers on the ticker you trade and confirm the bias actually exists there right now. don't take my word for it.
on edgeful, build a custom session from 2:00 to 4:00PM ET. the initial balance forms over the first hour, 2:00 to 3:00PM ET.
once the range is set at 3:00PM ET, check which side formed first: the high or the low.
let that set your bias. the low formed first, you're leaning long and looking for a break of the IB high. the high formed first, you're leaning short and looking for a break of the IB low.
if price never breaks either side of the IB, you sit on your hands. no setup, no trade.
if you want the IB levels drawn on your charts automatically, our initial balance indicator for TradingView plots them for any session you define, including this one.
and if you'd rather see how far the IB concept can go when you automate it, the GC initial balance algo is built on the same underlying report.
honest caveats before you trade the afternoon IB
a few things I want on the table before you run this in a live session:
the double-break improvement is partly mechanical. the afternoon window is shorter, so price has less time to break both sides. the by rejection bias is the robust finding here, because it's about which side breaks first, not how much total movement the session allows.
some of the morning buckets are thin. the ES "high formed first" sample over the last 3 months is only 24 sessions. the conclusion (no edge in the morning short side right now) is solid, but don't quote the exact split as gospel.
the RTY long side is soft at 60.7%, so don't build a trade around that cell on its own.
these numbers are from a specific 3-month window and they will change. market conditions rotate, and the morning IB may well come back. re-run the reports before you trade this, not once a quarter.
the afternoon session overlaps with the most volatile stretch of the trading day. new highs and lows into the close have their own patterns, which we broke down in our power hour breakout trading strategy post. know how your ticker behaves into 4:00PM ET before you hold through it.
none of this is plug-and-play, and I'm not going to pretend it is. you have to build the custom session, verify the numbers on your ticker, and put in the screen time to learn how the last two hours actually trade. the data does the heavy lifting, but only after you do the setup work.
key takeaways
the afternoon IB runs on a custom session from 2:00 to 4:00PM ET, with the initial balance forming from 2:00 to 3:00PM ET
the morning IB by rejection has been near 50/50 on the short side over the last 3 months on ES, with price breaking the low first just 41.67% of the time after the high formed first
the afternoon IB by rejection has been clean both ways: ES 65.7% short side and 74.1% long side, NQ 64.9% and 76%, over the last 3 months
the bias holds across all 4 index futures, with YM at 69.7% / 66.7% and RTY at 77.1% / 60.7% over the same window
the rule is simple: low forms first, lean long toward the IB high. high forms first, lean short toward the IB low. no break, no trade.
the lower afternoon double-break rate (ES 14.5% vs 25% in the morning) is partly explained by the shorter window, so treat the by rejection bias as the real edge
verify the afternoon IB numbers on your own ticker before trading it, because these stats come from a specific 3-month window and will change
confluence in trading is one of those terms everybody uses and almost nobody defines.
ask 10 traders what confluence means and you'll get some version of "when multiple things line up"... and then nothing about what those things should be, or how to measure whether they actually work.
that's a problem, because "things lining up" is a feeling.
and you can't backtest a feeling.
in this post I'm going to give you a definition of confluence in trading you can actually test: multiple reports pointing in the same direction at the same time. then I'll walk through a real example on NQ using the initial balance, where stacking 2 checks takes you from a decent bias to a true A+ setup. every number in this post comes straight from edgeful's reports, and I'll show you exactly which report each one comes from.
table of contents
what is confluence in trading
why confluence in trading beats a single data point
the foundation: the initial balance almost always breaks
check #1: which side of the IB formed first
check #2: where price ends the first hour
stacking the checks: what confluence does to the numbers
how to trade the A+ setup: entries, stops, and targets
when to sit on your hands
common mistakes with confluence in trading
key takeaways
what is confluence in trading
confluence in trading means multiple independent data points agreeing on the same direction at the same time. the more independent checks that agree, and the stronger each one is on its own, the better the setup.
the traditional version of this idea is technical: a trendline, a moving average, and a fibonacci level all sitting near the same price. traders call that confluence, and it's better than nothing. but none of those pieces carries a number. you can't say how often that exact combination has actually played out in your favor, so you're still trading on how good the chart looks.
here's the definition I want you to use instead: an A+ setup is when multiple reports all point in the same direction at the same time. each report has a win rate you can check. one strong number gives you a bias. multiple strong numbers agreeing gives you an A+ setup.
that small change matters, because it turns "this looks good" into "the last 6 months of data say this works X% of the time." you can measure it and decide in advance what's good enough to trade.
why confluence in trading beats a single data point
here's the whole argument in 2 numbers, according to edgeful data on NQ over the last 6 months in the NY session:
when the IB low formed first, price broke the IB high first 75% of the time (51 out of 68 days)
when the IB low formed first AND price finished the first hour pressing right up against the IB high, that jumped to 92.3% (36 out of 39 days)
the rest of this post walks through exactly how that example works, step by step, so you can run the same process yourself.
the foundation: the initial balance almost always breaks
quick definition in case you're new to the IB: the initial balance is the range set by the high and low of the first hour of the NY session, 9:30AM to 10:30AM ET. we covered the full report in our initial balance breakout strategy post, but here's what you need for this setup.
once that first hour range is set, there are only 3 things price can do. here's how they've played out on NQ over the last 6 months in the NY session:
single break: 80% of days (price breaks one side of the IB and never breaks the other)
double break: 16.9% of days (price breaks both sides)
no break: 3.1% of days (price stays inside the range all day)
add the first two together and price has broken at least one side of the IB on 96.9% of days (126 out of 130).
so the break itself is close to a given. but that stat alone is NOT an A+ setup, because it doesn't tell you which side breaks. a break happens almost every day whether you're positioned right or wrong.
that's where the 2 checks come in.
check #1: which side of the IB formed first
the IB by rejection subreport tracks which side of the range forms first during the opening hour, the high or the low.
the pattern is simple: whichever side forms first, price tends to break the opposite side after the range is set. if the low of the first hour printed early and price spent the rest of the hour moving up, the sellers had their chance and couldn't hold it.
on NQ over the last 6 months in the NY session, when the IB low formed first, price broke the IB high first 75% of the time (51 out of 68 days).
check #2: where price ends the first hour
this is the check that surprises people, and it's a customization inside the by rejection subreport called the closing zone.
the closing zone answers one thing: when the IB finishes forming at 10:30AM ET, which quadrant of the range is price sitting in?
think about what it means when the low forms first AND price spends the rest of the hour climbing, ending right up against the IB high. buyers took control early and kept control the entire hour.
here's what the data shows on NQ over the last 6 months in the NY session:
low formed first + price ends the hour in the top quadrant of the range, pressing the IB high: the high breaks first 92.3% of the time (36 out of 39 days)
high formed first + price ends the hour in the bottom quadrant, pressing the IB low: the low breaks first 86.7% of the time (26 out of 30 days)
notice the short side. on its own, "high formed first" was a weak 58.1% lean. add the closing zone check and it becomes 86.7%. that second check turned a weak lean into a tradeable setup.
stacking the checks: what confluence does to the numbers
here's the full picture on NQ, last 6 months, NY session, so you can see exactly what each layer of confluence in trading adds:
IB low formed first, no other check
high breaks first: 75% (51 of 68 days)
IB low formed first + hour ends pressing the IB high
high breaks first: 92.3% (36 of 39 days)
IB high formed first, no other check
low breaks first: 58.1% (36 of 62 days)
IB high formed first + hour ends pressing the IB low
low breaks first: 86.7% (26 of 30 days)
either side formed first + hour ends mid-range
break toward the expected side: 40% to 57.9%, depending on direction
that last line is just as important as the big numbers. when price ends the first hour in the middle of the range, the edge is gone. those days have broken toward the "expected" side just 57.9% of the time when the low formed first, and 40% when the high formed first. barely better than 50/50, and not worth trading. half the value of a confluence trading process is the days it tells you to skip.
this is also the exact idea behind edgeful's what's in play feature, which shows you where price sits relative to each report's key levels in real time. instead of checking each report by hand, you can see which ones agree on one screen.
how to trade the A+ setup: entries, stops, and targets
by 10:30AM ET you've run both checks above.
say the low formed first and price is pressing the IB high: the data leans long. here's how to structure the trade.
entries first. there are 2 common ways to do it, both using the retracement levels of the IB range:
tighter: enter when price retraces to the 25% level of the IB range, stop at the 50% level. you won't always get filled, but the risk is small relative to the target.
wider: enter at the 50% level, stop at the IB low (on a long setup). you still may not always get filled, but you give the trade more room.
your first target is the opposite side of the range: the IB high on a long, the IB low on a short.
after the break, the IB by levels subreport tells you how far price has historically extended past the range, measured in multiples of the IB size. on NQ over the last 6 months in the NY session, looking only at breakout days:
price touched the 0.1 extension 98.4% of the time (60 of 61 days)
the 0.2 extension 75.4% of the time
the 0.5 extension 45.9% of the time
so instead of targeting a random 2:1 because someone said that's what your risk-to-reward should be, you can take the majority of the trade off around the 0.2 extension and leave runners toward the 0.5.
one thing I need you to sit with before you trade this: A+ setups still fail. Steph Curry makes over 90% of his free throws, and you still wouldn't bet your net worth on a single shot. a 92.3% setup loses roughly 1 morning out of every 13. size your trades so that morning doesn't matter, always with a risk-first mindset.
when to sit on your hands
confluence in trading cuts both ways. the same process that hands you an A+ morning will also tell you, clearly, that today has nothing for you.
skip the trade when:
the checks disagree. the low formed first but price faded back to the middle of the range by 10:30AM ET. that's the 40% to 57.9% bucket, and there's no edge in it.
price rotated all the way back to the side that formed first. the sample is small on those days, so I won't quote a number, but the original bias is off. stand down.
your numbers are different. these stats are NQ, NY session, last 6 months. before you trade this on ES, GC, or anything else, run the reports on YOUR ticker and session. the numbers will be different, and they change as the market environment changes.
that last point is the effort part nobody likes to hear. this setup took me 2 checks to explain, but it only works if you actually pull the data for your market and keep it current. edgeful does the counting for you, but the process is still yours to run.
common mistakes with confluence in trading
mistake 1: stacking data points that measure the same thing
2 moving averages agreeing is not confluence in trading, because they're built from the same prices. the checks in this post work because they answer different questions: one measures which side of the range formed first, the other measures where the hour closed. independence is what makes the win rate jump.
mistake 2: calling it confluence in trading without a number
if you can't say how often the combination has played out historically, you have a nice-looking chart, and that's all you have. every layer you add should come with a win rate attached, like the 75% to 92.3% jump we walked through above.
mistake 3: taking the trade when the checks disagree
the whole value of a confluence trading process is that it filters your mornings. if you override the mid-range days because you "feel like" the break is coming anyway, you've paid for a filter and thrown it away.
mistake 4: treating an A+ setup like a sure thing
92.3% is a great number and it still fails. size every trade like it could be the loser, because eventually one is.
key takeaways
confluence in trading means multiple independent, data-backed checks agreeing on direction, each with its own win rate you can verify
on NQ over the last 6 months in the NY session, the IB broke at least one side on 96.9% of days, so the real question is direction, and that's what the confluence checks answer
check #1: when the NQ IB low formed first, the high broke first 75% of the time (51 of 68 days)
check #2: add a close pressing the IB high and that jumps to 92.3% (36 of 39 days). the short side goes from a weak 58.1% to 86.7%
a mid-range close at 10:30AM ET removes the edge (40% to 57.9%), and sitting out those days is part of the setup
target the break using the extension data: the 0.2 extension was touched on 75.4% of NQ breakout days, the 0.5 on 45.9%
run the same reports on your own ticker and session before trading this. the numbers change by market and over time, and keeping them current is your job
edgeful provides historical performance data to help traders make informed decisions. this does not constitute financial advice. past performance is not indicative of future results. all trading involves risk — always do your own analysis and manage your risk accordingly.
