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What is Range extension?

Price moving beyond the initial balance range, often a sign that other-timeframe participants have become active.

In context

The Market Profile reasoning goes like this. Day-timeframe traders tend to rotate within the IB. For price to leave the IB with conviction, larger or longer-horizon participants (the OTF) usually have to get involved. So range extension can be seen as a possible footprint of the OTF. That is why the CBOT's Market Profile study material and Dalton's books note that the absence of range extension usually means short-term traders are in control.

From Chapter 7: Auction Market Theory

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Related terms

Initial balance (IB)Balance

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Education only. Not financial advice. Trading involves substantial risk of loss.