data-backed profit targets: 3 reports for setting consistent exits

welcome back to stay sharp... last week we covered how to set data-backed stops, and this week we're flipping to the other side of the trade.

we've all been there — got positioned in a nice trade with a great entry, but then have no idea when or where to take profit targets. and there are three scenarios that I see as a result:

• scenario 1: you take profit targets way too early because you're scared. price keeps running without you. you end up leaving a ton of money on the table and get emotional about it.
• scenario 2: you don't know where to take profit targets, so you hold... and hold... and hold. then you watch your winning trade turn into a loser. also super frustrating.
• scenario 3: you pick some random level based on "gut feel" and wonder why it never seems to work — sometimes price hits the level, sometimes it doesn't, and at the end of the week or month your account balance isn't any higher than it was at the start.

sound familiar?

here's the thing... there are 3 reports that'll show you exactly where you can expect price to go on a consistent basis. they're not some made-up levels, but actual reports that allow you to build confidence in executing a data-backed profit targets plan.

let's get into it:

table of contents

• scenario 1: reversal setups — when price gaps outside key levels
• scenario 2: breakout setups — when price opens within key levels
• report #1: ORB by levels - your extension roadmap
• report #2: IB by levels — initial balance extensions
• report #3: inside bars - yesterday's range as targets
• key takeaways
• frequently asked questions

scenario 1: reversal setups — when price gaps outside key levels

the first scenario I want to cover answers the question of what you do when price gaps outside of your key levels. for this scenario, our key levels are going to be:

• the ICT midnight open
• yesterday's close
• and yesterday's high/low

and to be honest — these are the 3 levels I check premarket, every single morning. understanding where price opens relative to these 3 levels tells me all I need to know about my bias going into the session.

here's why these levels are key to track every single day, as well as the data from their reports:

• ICT opening retracement report: measures how often price retraces back to the midnight open (12:00 AM ET candle) during the NY session. when price opens above the midnight level, it retraces back down 66% of the time. when it opens below, it retraces back up 66% of the time.

so ⅔ of the time, you can expect price to touch this level when it opens above/below it. these are strong probabilities for setting profit targets...

• outside day report: tracks what happens when price opens outside yesterday's range (above yesterday's high or below yesterday's low). when price opens above yesterday's high, it reverses back down to touch that level 59% of the time. when it opens below yesterday's low, it reverses back up 64% of the time.

note: you can filter this data even further by using the outside days by size subreport. what you'll notice is that you should only be targeting outside day gaps between 0.01-0.40% in size — they have the highest historical probabilities of filling.

• gap fill report: measures how often price retraces back to the previous session's closing price after gapping above or below it. gaps up fill 58% of the time, gaps down fill 68% of the time.

note: you can filter this data even further by using the gap fill by size subreport. what you'll notice is that you should only be trading gaps between 0.01-0.40% in size — they have the highest historical probabilities of filling.

how these reports are the foundation of the ultimate reversal setup

when we gap above or below of all 3 levels:

• the ICT midnight open
• yesterday's high/low
• yesterday's close

I know the probabilities are on our side for a reversal back to those 3 levels. there's no guessing involved — the data above supports this bias for profit targets.

to put it simply: if you're a reversals trader, you must be aware and track these levels. they are data-backed profit target levels that you can build a confident strategy around — no more guessing.

price gapped up above all 3 levels, and then quickly reversed back down. it doesn't matter what happens after the trade — all you need to do is execute the 3 data-backed profit targets and move on to the next trade.

and even if all 3 levels don't set up at once, you can still use them by themselves.

gap down below the prior session's close and the midnight open, with a quick reversal back up to these levels — which ended up being the high of the day. simple reversal trade, 2 data-backed profit targets to execute.

scenario 2: breakout setups — when price opens within key levels

so we've just covered what happens when you gap up/down and the 3 levels you should be using to take profit targets consistently.

scenario 2: breakout setups will cover what reports and levels you should be using when looking for breakout trades.

• when to use this: price opens between the key levels (inside yesterday's range), usually you'll be trading an ORB breakout/breakdown or an IB breakout/breakdown
• reports you need:
  • inside bars report
  • ORB by levels report
  • IB by levels report

let's quickly cover each:

report #1: inside bars report

this report measures how often price breaks above yesterday’s high/low when opening completely inside yesterday’s range.

the data: 79% of the time, price breaks out of yesterday's range.

the YM data is clear:

• 79.27% of the time price breaks out of yesterday's range (65 out of 82 days)
• only 20.73% stays inside (17 out of 82 days)

the setup: if you're trading within yesterday's range, you can confidently target either yesterday's high or low as your first profit target level. the direction depends on the bias you determine — easily backed by data using our what's in play screener.

report #2: ORB by levels

what it measures: how often price hits specific extension levels beyond the opening range, based on multiples of the ORB size (high to low of first 15 minutes).

here's the YM data over the last 6 months:

looking at all days (breakouts and breakdowns combined):

• 0.2 extension: 60% of the time
• 0.3 extension: 56.49% of the time
• 0.4 extension: 52.67% of the time
• 0.5 extension: 50.38% of the time
• 0.7 extension: 47.33% of the time
• 1.0 extension: 41.22% of the time
• 1.5 extension: 28.24% of the time
• 2.0 extension: 16.03% of the time

these aren't random levels... they're multiples of the actual opening range. if the ORB is 138 points, your 0.5 extension is 69 points beyond the high or low.

so if you're trading the ORB strategy — it's best you use the by levels subreport to optimize your profit targets, and for YM, the highest probability range based on data is 0.2x - 0.5x the ORB range.

you can do the same analysis for the downside using profit targets data as well. just make sure you're analyzing the right ticker — the data is drastically different from YM to others.

report #3: IB by levels — initial balance extensions

what it measures: how often price hits specific extension levels beyond the initial balance range (first hour of trading: 9:30-10:30 ET).

here's the YM data:

IB breakout extensions:

• 0.3 extension: 80.39% of the time
• 0.4 extension: 64.71% of the time
• 0.5 extension: 56.88% of the time
• 0.6 extension: 50.98% of the time
• 0.7 extension: 47.06% of the time

so if trading an IB breakout, it's best you set your profit targets within the 0.3x-0.6x extension range.

IB breakdown extensions:

• -0.3 extension: 81.40% of the time
• -0.4 extension: 67.44% of the time
• -0.5 extension: 62.79% of the time
• -0.6 extension: 58.14% of the time
• -0.7 extension: 58.14% of the time

the initial balance is a longer timeframe than ORB (60 minutes vs 15 minutes), so you get different probability zones. the extension data shows you exactly where you can expect price to go after breaking one side of the first hour's range for your profit targets.

frequently asked questions

what are the best profit targets for day trading?

the best profit targets for day trading are based on historical data, not arbitrary ratios. use ICT midnight open levels (66% hit rate), ORB extensions at 0.2x-0.5x (50-60% probability), and yesterday's high/low when price opens inside the range (79% breakout rate). these data-backed profit targets give you specific levels to target rather than guessing. but, always check back for current stats using the corresponding edgeful reports because the data is always changing.

how do you calculate profit targets in trading?

to calculate profit targets, use extension formulas based on range sizes. for ORB profit targets: multiply the opening range by 0.2x, 0.3x, 0.5x to get your target levels. for IB profit targets: use 0.3x-0.6x of the initial balance range. these aren't random - they're based on historical probabilities of where price actually moves.

should profit targets be based on risk reward ratios?

profit targets shouldn't be based solely on risk reward ratios like 1:2 or 1:3. instead, use data-backed levels where price historically moves. a 1:1 target that hits 80% of the time is better than a 1:3 target that only hits 20% of the time. focus on probability-based profit targets rather than arbitrary ratios.

what is the target profit formula for futures trading?

the target profit formula for futures depends on your setup. for reversals: target ICT midnight open (66% probability), yesterday's high/low (59-64% reversal rate), or gap fill to previous close (58-68% fill rate). for breakouts: target ORB extensions (0.2x-0.5x with 50-60% hit rates) or IB extensions (0.3x-0.6x with 50-80% probabilities).

how do inside bars help with profit targets?

inside bars show that when price opens within yesterday's range, it breaks out 79% of the time. this means yesterday's high and low become high-probability profit targets. use the inside bars report to identify when you're in a breakout scenario, then target the opposite side of yesterday's range with nearly 80% confidence.

key takeaways

here's everything you need to know to sum up and apply today's stay sharp:

1. every morning, just like I do, check where we're opening relative to the midnight open, yesterday's high/low, and yesterday's close. these levels will tell you whether to trade for a reversal, or look for a breakout.
2. for reversal setups, use these 3 reports to find high-probability profit targets:
   1. ICT midnight open: 66% retrace rate in both directions
   2. outside days: 59% reversal rate from above yesterday's high, 64% from below yesterday's low
   3. gap fills: 58% fill rate for gaps up, 68% for gaps down
3. for breakout setups, use these 3 reports to find high-probability profit targets:
   1. inside bars: 79% breakout rate from yesterday's range
   2. ORB extensions: 0.2x-0.5x are your highest probability zones (60% down to 50%)
   3. IB extensions: 0.3x-0.6x extensions (80% down to 50%)

by using edgeful's reports — you no longer have to get caught in a good trade not knowing when the right time to take profit targets. no more round-tripping, and no more selling too early…

all you have to do is follow the steps above before every single trade — and you'll know exactly where to expect price to go.

check these 3 reports before every trade - they'll show you exactly where price actually goes for your profit targets.