Trading NR7 setup

[bandlab2]

so we have a NR7 day in nifty !!! also the range is getting squeezed gradually

100
120
131
137
151
198

i took 4300 straddle at 36 rs each. lets see

 

[AW10]

Bandlab2, your observation on NR7 day today is right.
We have also got 88 points range on NIFTY Spot today (88.75 / 119/ 130.35/ 119.5 /153/185 /132).

IMO, You have taken June straddle so that doesn't give any time for market for breakout from the range. I would have preferred to take 4300 July straddle.

If you don't mind, then Can u plz paper trader 4300 july Long straddle position at todays close price as well.

Happy Trading.

 

[bandlab2]

sunil, when this break-out occurs how long it will the effect ? i thought the effect will be for couple of days only. thats why i took june. if the trend is continuing then i can roll-over to july (call or put). if we break-out tomorrow morning (we need to take out 4218 on long side which is only 13 points from todays close) we can have the effect till thursday EOD. Also fed is going to take a decision on interest rates tonight, so market will have a gap either side.

buying july contracts now involves lot of money !!!

i will square off losing leg tomorrow , hopefully

 

[darshanshukla]

Dear AW10 and all members,
Accept regards from Dr. Darshan Shukla,
Viewing your thread since beginning.
posting here the excell file given by you in first few post of thread.. showing NR7 Day with 89 points range in Nifty Cash.
Give your views in detail regarding targets (either side)
Thanking you,
Dr. Darshan Shukla

 

[bandlab2]

today and yesterday we have NR7 in SBI cash. so its NR8 today. are we heading for some breakout tomorrow ?


6/24/2009 1675 1730 1695 1706 35 Yes
6/23/2009 1675 1725 1664.45 1706 61 Yes
6/22/2009 1731 1760 1686 1690 74
6/19/2009 1715.3 1745 1677.1 1724 68
6/18/2009 1697.8 1728.7 1659 1715.1 70
6/17/2009 1709 1718 1652.75 1659 65
6/16/2009 1616.4 1722 1598.95 1709.1 123
6/15/2009 1629 1674 1610 1650 64

 

[MurAtt]

Cannot someone code an AFL (since I'm a nobody in coding) -- wud be much easier tracking the stocks and NF.

Hope I'm not asking too much ....

 

[AW10]

Dear AW10 and all members,
Accept regards from Dr. Darshan Shukla,
Viewing your thread since beginning.
posting here the excell file given by you in first few post of thread.. showing NR7 Day with 89 points range in Nifty Cash.
Give your views in detail regarding targets (either side)
Thanking you,
Dr. Darshan Shukla

Dr. Shukla, You are right that we have NR7 day today and we can anticipate a breakout tomorrow (most likely or day after tomorrow). and range expansion (i.e. wide intraday bars)
This setup only indicates that mkt is in contraction mode or not. It doesn't tell any target etc. So we got to rely on other method of chart reading to find the support / resistence levels. If you look at nifty chart, then market made Pivot High at 4693 / 4352in recent past. Thats the levels buyers lost the battle and sellers have won. So they obviously will act as next resistence level. So if market breaks on the upside, they can be taken as target levels.

Same on the downside, we had Pivot lows at 4206/4143/4092 where buyers have won the battle in recent past. So they will act as support, just in case market breaks on the downside.

This is what can be anticipated based on price behaviour pattern. Market can still do something different so we got to be prepared to accept whatever comes to us.

This setup also doesn't tell us the direction in which it can breakout. So we have to for market to tell us the direction in which is breaking out.

Hope this makes it a bit clear.

Happy Trading

 

[AW10]

Cannot someone code an AFL (since I'm a nobody in coding) -- wud be much easier tracking the stocks and NF.

Hope I'm not asking too much ....

Post #49 in this thread has an AFL code. Don't know if that is 100% correct.
Plz chk that out. If it flags NR7 today,then probably it is OK. you can also compare the signals with the signals that are marked in Excel sheet that Dr. Shukla has attached today.

Happy Trading

 

[AW10]

if we break-out tomorrow morning (we need to take out 4218 on long side which is only 13 points from todays close) we can have the effect till thursday EOD. Also fed is going to take a decision on interest rates tonight, .....

I think, you mean 4318.. for upside breakout.

Happy Trading

 

[anthony10]

Just initiating this thread to discuss possible expansion setup

1) What is NR7 pattern (Narrow Range 7) ?
Market goes thru regular contraction (i.e. daily trading range getting shorter and shorter) and expansion (i.e. daily trading range getting bigger) cycle. Expanding range is followed by Contraction and vice-versa. So if we can indetify the narrow range days, then it give us a step ahead of everybody to benefit from coming expansion.

NR7 is term given to a day that has the daily range smallest of last 7 days including that day.

NR4 is variation of this where the lookback period is 3 days + current day i.e. 4 days.

E.g. -

[B]Date	         High            Low             Range	Remark[/B]
27-May-09	4,286.45	4,115.25	171.20	
28-May-09	4,354.85	4,254.85	100.00	
29-May-09	4,488.05	4,340.75	147.30	
1-Jun-09        4,545.40	4,450.40	95.00	NR 4 day. Range smallest of last 7 entries from 28/May till today i.e. 1-Jun )
2-Jun-09	4,586.40	4,453.40	133.00	
3-Jun-09	4,574.90	4,478.60	96.30	
4-Jun-09	4,582.20	4,453.45	128.75	
5-Jun-09	4,636.85	4,561.95	74.90	NR 7 day. Range smallest of last 7 entries from 28/May till today i.e. 5-Jun )
				
8-Jun-09	 4,611.40	4,404.65	206.75	Break of the low of 4561 of NR7 day took it to low of 4365 in next 2 days.  Notice the range expansion (206+197 points).
9-Jun-09	 4,562.45	4,365.10	197.35

As far as I know, this setup was discussed by Toby Crabel first. Later Linda Raschke has also discussed this in her book "The street smart". To know more about them you can either refer to these sources or raise questions here and I /other members here will try to clarify it.

Happy Trading.

How to Find NR7 day..

1) Get the High and Low data of last few period
2) Calculate the range of each day i.e. high - low) for each day
3) Compare the range of a today and previous 6 days range (to get NR7. To get NR4 get last 3 days range)
4) If todays range is smallest of all 7 days, then today is NR7 day..else not.

It is that simple.

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