hard · Volume Profile Analysis auction-market-theory
Two consecutive sessions in Gold (GC) both post IB ranges equal to roughly 90% of the respective 20-day average IB (an 'average' IB per the standard heuristic). Session A closes inside the IB with no extension. Session B breaks the IB high by 40% of the IB range mid-afternoon and closes there.
Applying the standard IB-width heuristic for probability of closing outside the IB, which statement about these two sessions is most accurate?
- Session A is inconsistent with the heuristic, since an average IB should force an outside close with high probability
- Both outcomes fit the heuristic, since an average IB implies roughly even odds of an inside versus outside close
- Session B is inconsistent with the heuristic, since an average IB implies the close should almost always stay inside
- Neither outcome is informative, since the heuristic applies only to narrow or wide IBs, never an average one
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