When I started my journey as a profile trader, I used to have a lot of confusion and conflict with the technical concepts of market profile. Slowly I started gaining the conviction on the trade setups that I was comfortable to trade. However, when I started monitoring my trade results, the reward factor was not that great.
Shockingly I found a pattern in my trade style and around 75% of the time I was opting trades only on neutral days or non-trend days. And when I reviewed the overall market moves in that period, I noticed that I had missed many normal variation days! Where the market extended the range in one side direction ( 80% of the IB Range ).
That’s the huge knock-on to my thought process. As traders, we are always demanded to think in probabilities. Just think about it, if I keep on opting the trades on low probable and low conviction day structures(Neutral or non-trend day), how can I increase my profitability factor? It’s certainly impossible. Profitability can be increased only when I get good rewards on what I am risking. Image 1.1 shows the Probability of occurrence and conviction level of day structures.