Bar Scalper - Day Level Probabilities For Extended Target and Day Level Bias - ES
Day level probabilities help us with achievable targets for trades that we initiate. We have used Market Profile probabilities and all the tested probabilities with the past 10 years of data. These probabilities help us with extending the targets and also avoiding the opposite direction trade around it. Always keep this chart open next to our trade initiation chart so that we won’t lose track of where we are at the day level. In this chart, we are tracking previous Day High/Low, overnight High/Low, day Open, day High/Low Low, day Mid, opening swing High/Low(OSHigh, OSLow), Estimated IB High/Low, Estimated Day High/Low.
NOTICE: Derivatives trading involves substantial risk of loss. Past performance is not necessarily indicative of future results.
Opening Swing, Estimated IB and Day High-Low:
We have generated extensive probabilities based on opening swings shown in the diagram. Using this swing length as our first measuring stick to the estimate first-hour trading range( Initial Balance) or IB Range with range High and low along with Current Day High and Low.
Estimated current day High and Low will be re-evaluated once after first-hour trading (IB) is completed.
These Estimated IB, Day High-Low for targets, and expecting the market to bounce within 6 ticks from these estimated values.
Day Level Probabilities - Initial Balance(IB)
| IBHigh OR IB Low Break | 97% |
| IBHigh AND IB Low Break | 28% |
In the market profile, terms Initial balance (IB) is treated as the first one-hour trading High(IBHigh) and Low(IBLow). These IBHigh and IBLow as measuring sticks to build probabilities and finding the interesting tradable results.
Once after IBHigh and IBLow are formed, these High or Low will get taken out 97% of the time by the end of the market close. If one side is taken out, then only 28% of the time the market will cross the other side.
So, 78% of the time we can treat nonbroken side as Day High or Low.
Day Level Probabilities - OverNight High/Low
| ON High OR ON Low Break | 95% |
| ON High AND ON Low Break | 25% |
Overnight(ON) High and Low are Globex session High and low. Using these ON High and ON Low as measuring sticks to build probabilities and finding the interesting tradable results.
These ON High or ON Low will cross 95% of the time by the end of the day. If one side crosses there is only 25% of the time the market will cross the other side.
So, 75% of the time the market will not cross the nonbroken side.
How Do We Use These Day Level Probability Information?
Bar Scalper system will provide you a very short term High probability Entry, Exit with a fixed stop of 4 ticks from entry. Using these day level probabilities as extended targets.
Examples:
- If IB High is not crossed and you are long, you can use IB High as the target.
- If IB High is crossed and you are short, you are advised not use IB Low as the target, as it has very low probability of crossing it.
- If the market is trading around Estimated Day High and our system finds sellers, then we may take a short trade