Trade Reversals with Market Profile’s IB Fake-Out

📊 Market Profile Strategy: Fake-Out with IB Value

Market Profile is a powerful tool for understanding intraday structure. This strategy focuses on using the Initial Balance (IB) to identify fake-out opportunities—ideal for range-bound or balanced markets.

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✅ Setup Rules

• IB must be significant – either large or at least of minimum size.
• No exhaustion tails – indicates unfinished auction, better for reversals.
• Market should be balanced – avoid trending days for this setup.

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📉 Bearish Fake-Out Setup

1. Wait for the first 1 hour of market to define the IB range.
2. If IB is formed above the median of the day’s range, watch for a break above IB high.
3. When price breaks IB high and returns inside the IB range, this indicates a fake-out.
4. Enter short once price confirms re-entry inside IB.
5. Target: Low of the IB.

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📈 Bullish Fake-Out Setup

1. Wait for a break below the IB low.
2. If price returns inside the IB range, this signals a bullish fake-out.
3. Enter long once price reclaims the IB range.
4. Target: High of the IB.

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🔑 Key Reminders:

• Use this only in balanced market conditions.
• Avoid days with strong trend behavior.
• Fake-outs usually appear when traders overreact to breakouts.

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This method helps traders anticipate potential reversals caused by false breakouts of the Initial Balance. Practice it on historical charts before applying it live.