Trading NR7 setup

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AW10

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Straddle & Strangle......I have quite different view on both of them.....both of them are useful only if we get good gap up opening on the next of buying.....Most of the times I have observed that after NR7 day, we dont get good gapups but in the middle of the trading session nifty breakout and give us a trend......and then in this case I suppose unidirectional strategy suits best to me (according to direction of the breakout take the call or put)....

Thanks...
WOD, you are right if your focus is just next day. But if you are swing trader and looking for next few days then they the buyer have wait for few days to see the real trade emerging from it. Till that time, it is mkt neutral position. What u loose is only the timedecay on each leg.. but it is around 3 to 5 Rs for Sept ATM options.

But if you are intraday player, then yes, you can monitor the market for breakout and take directional call/put.

In short, it all depends on your time horizon for the trade (1 day,few days) , and what type of trader are you (intraday, swing) ?

Happy Trading
 
Hi AW10,

I am posting OHLC data of HCC stock since 1st July and as per your tracker I have marked them with TR7 setup Yes whereever applicable...Could you please review the attached sheet and let me know if I understood the concept correctly and marked the YES at proper places?

Also if you could shed some lights on the possible trades from this data that wud be appreciable...

Thanks
Abhinav
 
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AW10

Well-Known Member
Abhinav,
I had a look at your sheet. Do 1 thing, can you plz put following formula in Cell I-8 and then copy it in remaining part of Column I.
=IF(G8<MIN(G2:G7),"NR7","")

It checks if todays Range is lower then then Min range of last 6 days. That effectively tell us that today range is minimum of last 7 days range.
And if condition is met, then it sets the cell value to NR7, else the cell remains as blank.

You will know it yourself if you have marked it correctly or not.

Please remember, NR7 is just a setup that tells that market is contracted to very small range.. and very soon it the range is going to expand.
For how to trade this, please visit the post # 4 on first page of this thread where I have given some ideas about how you can trade NR7 setup..
Please define your entry / stoploss and trailing stoploss rule and backtest it.

Feel free to raise any other doubt/question if you come across.

Happy Trading
 

AW10

Well-Known Member
Thanks Satya for sharing this pictorial view of Contraction and the days after it.
Today was again 60 point range day, Thanks to yesterdays 40 pts range, it is not flagged as NR7 but 60 points is a contraction for nifty's normal range of 100 points approximately.

These 3 days of narrow range indicates that major players are not interested in the market. Absence of their interest near 4700 level indicates to me that maybe they are not willing to take it higher. (or maybe I am biased here for looking for weakness to justify myself).

Hope they come back tomorrow and give us resonable move to make few points.

Happy Trading.
 

Satyen

Well-Known Member
Thanks Satya for sharing this pictorial view of Contraction and the days after it.
Today was again 60 point range day, Thanks to yesterdays 40 pts range, it is not flagged as NR7 but 60 points is a contraction for nifty's normal range of 100 points approximately.

These 3 days of narrow range indicates that major players are not interested in the market. Absence of their interest near 4700 level indicates to me that maybe they are not willing to take it higher. (or maybe I am biased here for looking for weakness to justify myself).

Hope they come back tomorrow and give us resonable move to make few points.

Happy Trading.
Yes dear AW10 may or may not we break 4700 but this contraction implys there will be trend day soon and we may start 1/2 false start which is not a issue but have asked in prev pages how to tackle failse break out etc by posting two chart still waiting to get some ideas hope to get some ideas so that can work on
 

AW10

Well-Known Member
Dear AW10 want to ask little bit off topic .........

When we have a break out and move rapidly without giving any pivot to trail stop ( Prefer to trade on 60 min pivots ..) then a V shaped recovery and hit stop ..... is it ok to bring SL to break even after such move .....

But ..... after how much move ?? and if it kiss our SL and then reverse back then what to do .............??

Till now only using Pivot ...... want to get some ideas from you
here posting two charts with two scenarios .....

Waiting your comment ..............
Satya, Sorry about delayed reply. But here are my thoughts.
Managing trades with trailing stops is always a tricky issue. If we move our stops too fast, then we risk being stopped out at wrong place.. and if we wait then we leave too much of paper profit no the table.
It all depends on our exit strategy. I totally agree with you on placing the stops at Pivot points. I believe the if we put stops at some random level then it just ensures that they are hit.
Over a period of time, in my observations - V type recovery are not too frequent.. and market's respect for pivot levels (with appropriate filter to hide our orders from smart players) is lot more frequent.

I can only suggest some ideas about protecting profit when it has come from abnormal move.
Don't know if you have read about Chandelier Exit Strategy or not.. Like chandelier hangs from the roof (say 2 feet's), similarly we can define our exits hanging few points below the latest roof i.e latest high of the market (for long trade). As market makes new high, our stops also moves up. But if market comes down, then it ensures that we don't loose more then certain amount of profit cause our stops don't move down but stays at same level below the latest high (i.e. equal to the height of chandelier). People use 3 ATR as this height, but one can also use x number of points depending on one's comfort level.

Another idea could be to split our position in two parts - swing part and scalp part (here our definition of scalp will not be 5 points move but a trade that captures only 1 leg of the trend). And use different exit strategy for each part. Swing part can continue to follow Pivot based trailing logic and chase multiple legs of the trend whereas scalp part can be managed by Chandelier exit / target based exits / 1 bar or 2 bar pattern based exits (engulfing, hammer, etc) or any other faster exit approach ..

Generally we should have fair idea about the trend size in our timeframe. So say, if we have observed that 70% of 60m trends at not more then 150 points in one leg and then they retrace, then we know when mkt gives us 200 points leg, then something abnormal is taking place and hence better to protect exceptional profit by being more aggressive and look for next entry setup.

(leg = distance from 1 Pivot high to next pivot low, Trend = 3 wave or 5 wave pattern i.e. having 3 legs or 5 legs)

I am sure, as a seasoned trader, you will not experiment it in market but backtest it first.

Hope this gives u some ideas to think about.

Managing exits have been (still they are) challenge for me as well. Would certainly like to get your thoughts on this. If you know of any good source of info/book etc then please share it.

Happy Trading.
 

Satyen

Well-Known Member
Thanks Dear AW10 ........ no sorry etc plz i know you may caught in other works
will certainly try out the ideas given by you ,still now i m using only pivots
Thanks again.............
(same thing i am trying out in other forum of Saint also plz dont consider i m advertising the forum etc here )
 

rohangawale

Well-Known Member
nr7 stocks triggered on 26 aug:

Code:
[b]stock		high		low
nifty		4,698.00	4,659.00[/b]
abb		740.75		727.3
axis bank	936		917.5
bpcl		509.45		497.3
cipla		264		259
hdfc ltd	2539		2490.1
icici bank	768.4		752.5
idea		81.4		79.8
lt		1584.3		1564.7
national alum	340		335
ongc		1187		1169
rel cap		839.8		823.65
rel comm	268.9		263.75
siemens		492		483.05
unitech		92.7		90.75
close of nr7 stocks on 27th aug
Code:
stock		close
		
abb		745.55
axis bank	922.75
bpcl		493.9
cipla		269.15
hdfc ltd	2501.25
icici bank	750.55
idea		80
lt		1600.45
national alum	348.95
ongc		1173.25
rel cap		836.2
rel comm	263.1
siemens		494.1
unitech		93.85
 
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