Inventory Retracement Bar · Rob Hoffman

Hoffman IRB

A trend-continuation pattern that identifies when short-term institutional countertrend activity has concluded, signalling a return to the market's primary trend. The "reload" moment — institutions have filled inventory, and price is ready to resume.

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1 IRB Identification
Bullish IRB (Uptrend)
45% HIGH LOW
Open & Close ≥ 45% off the HIGH
Bearish IRB (Downtrend)
45% HIGH LOW
Open & Close ≥ 45% off the LOW

Candle Colour

Green or red does not matter. Only the relationship of open/close position relative to the bar's high or low is significant.

2 Trend Confirmation
Primary Tool 20-Period EMA
EMA Angle ≈ 45° slope
HTF Alignment Required

The next higher timeframe must be trending in the same direction. A 5-minute IRB in an uptrend should be confirmed by the 15-minute or 60-minute also trending up.

3 Entry Rules

Long Entry

1 tick above the high of the IRB candle.

Buy Stop

Short Entry

1 tick below the low of the IRB candle.

Sell Stop

Timing Constraint

Price should break the IRB level within the next 20 bars. Beyond that, the signal degrades significantly.

4 Exit & Risk Management

Initial Stop-Loss

Longs 1 tick below IRB low
Shorts 1 tick above IRB high
Max Risk / Trade < 1% of capital

Trailing Stop Schedule

ConditionAction
50% to target reachedLock 50% of profit
80% to target reachedLock 80% of profit
Major S/R hit (Fib · Pivot)Lock 90%+ of profit
5 Key Precautions

Avoid Sideways / Chop

The IRB is a trend-continuation setup. It fails in non-trending, range-bound conditions. Confirm directional bias with the 20 EMA slope before engaging.

Overextension Filter

If the IRB candle's range is significantly larger than the ATR of the prior 10+ bars, the trade carries elevated mean-reversion risk. Skip or reduce size.

6 Pine Script Indicator Defaults
IRB Threshold
45%
EMA Length
20
Slope Lookback
5 bars
Min Slope Angle
0.3°
ATR Length
14
Overext Multiplier
2.0×
Max Bars for Entry
20

Alerts

Three conditions available: Bull IRB Bear IRB Overextended

7 Pre-Trade Checklist
20 EMA at ≈45° angle? Trend
Higher timeframe aligned? HTF
Open & Close ≥ 45% off extreme? IRB
Candle range ≤ ATR × 2? Size
Entry = 1 tick beyond IRB H/L? Entry
Stop = 1 tick beyond opposite side? Stop
Risk < 1% of capital? Risk