easy · Volume Profile Analysis profile-shapes
A trader is analyzing a session in GBP/JPY with an ATR of 80 pips. The Initial Balance (IB) is only 15 pips wide.
According to the relationship between IB width and extension probability, what should the trader expect?
- A quiet 'Non-Trend Day' where price simply rotates around the open
- A high-probability 'Normal Day' staying within the 15-pip IB range
- A high probability (>70%) of a range extension and a potential Trend Day.
- A balanced 'Neutral-Center Day' resolving with two-sided breaks of the narrow IB
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