Trading NR7 setup

[AW10]

lnangia, I am not so much in stock trading so I don't follow it. Not sure about if Rohan is tracking it.
But you are right in observation that NR7 stocks which may not break on very next day, but they are still potential candidate for breakout. As per the list that Rohan is posting here, he does track till next day on what type of breakout we saw on yesterday's stock list..but not beyond that.

Maybe, another area for research or if someone wants to track it.

Happy Trading

 

[AW10]

Nifty has shown 38 points range tomorrow and 37 points range today (compared to recent 10day average range of 68 points). That is another period of extreme narrow range. Narrow range is no surprise at this time of year when holiday season is the theme.

Same is also true to US mkt where S&P 500 gave 4 NR7 days out of 7 trading days since 21-Dec.. and FTSE has shown 4 NRdays ( NR3 to NR7 days) in last 4 sessions.

Anticipation of range expansion in January is quite obvious. Which way will it expand ? It does not matter at all. I have created direction neutral positions with Long strangles of 5100 put and 5200 call of January series and now waiting for market to tell me what it is going to do.

Happy Trading.

 

[rohangawale]

lnangia;397684]Hi Rohan and Anup. Do you guys follow up on motionless stocks in which nr7 triggered but failed to move either on the upside or downside or just ignore it and move on to the new list ?

Inangia,
inbetween i used to post in the same sheet weather the stk has made 2NR7 or 3NR7 and the breakdown on it, but when i was not able to post the triggers for long time and started again, i had not mentioned that type of postings as still im not able to post it regularly,so not in sync with the postings, but from tomo i will make sure that i will mention what type of NR7 that stock has followed and then we can trade the breakout.

The reason i asked is because sometimes when nr7 triggers (on intraday charts) and an instant move does not take place it consolidates further for a couple of bars (max) and then either breaks out or down drastically. And it would be interesting to see if this particular behavior is prevalent on daily/weekly charts as well.

Cheers and Happy Trading

I usually track very few selected stks for my trading. in that my selected stk, if its in NR7 list, i had observed many times the it struggles to break on either side for quiet long time and turns back, weather its high or low. if before breakout only i get trading signal then i trade it with my tgt as prev day H/L level with sl of PH/PL levels.
previous days H/L are 1st resistance/Support for the stock on next day.

 

[rkkarnani]

AW, According to you, which is more important , the NR bar in Spot Nifty or NF???
Spot Nifty has two continous NR bars and second bar narrower than the first, in fact both bars have the Narrowest range in last 12 Trading sessions (NR12)!!
It is not so in NF, which has a NR4 bar today!!!

 

[rohangawale]

lnangia, I am not so much in stock trading so I don't follow it. Not sure about if Rohan is tracking it.
But you are right in observation that NR7 stocks which may not break on very next day, but they are still potential candidate for breakout. As per the list that Rohan is posting here, he does track till next day on what type of breakout we saw on yesterday's stock list..but not beyond that.

Maybe, another area for research or if someone wants to track it.

Happy Trading

AW10,
When i backtested NR7 strategy on some stks i was much more concerned for the result/breakout on the next day itself as im purely a intraday player and i dont keep any positions pending for next day.
But still if i had some time then i will try to backtest the same for 2NR7, 3NR7 & 4NR7 days and see the result.
One more logic behind not testing 2,3,4NR7 days is that, though if we get NR7, 2NR7 or 3NR7 days it reflects on our daily watch list and we are just concern abt the breakout on either side and trade it.
if on the 2nd day the stk turn to 2NR7 day, in that instance also we are not getting a valid breakout and we leave the stk on day 1.
automatically on 2nd day its coming in our watchlist and next day we are concern abt the breakout on either side to trade.

there are very few instances when we get 3NR7,4NR7 days. statistically will have to find out the % of days, and result on next day.

Lets c when its poss for me to do this additional homework

 

[rkkarnani]

AW10,
When i backtested NR7 strategy on some stks i was much more concerned for the result/breakout on the next day itself as im purely a intraday player and i dont keep any positions pending for next day.
But still if i had some time then i will try to backtest the same for 2NR7, 3NR7 & 4NR7 days and see the result.
One more logic behind not testing 2,3,4NR7 days is that, though if we get NR7, 2NR7 or 3NR7 days it reflects on our daily watch list and we are just concern abt the breakout on either side and trade it.
if on the 2nd day the stk turn to 2NR7 day, in that instance also we are not getting a valid breakout and we leave the stk on day 1.
automatically on 2nd day its coming in our watchlist and next day we are concern abt the breakout on either side to trade.

there are very few instances when we get 3NR7,4NR7 days. statistically will have to find out the % of days, and result on next day.

Lets c when its poss for me to do this additional homework

Do you have an 'exploration' to identify 2,3,4 NR7 !! or we have to look for them manually?
If we have to look for some specific stocks , can help you with a few stocks if you can identify the same!!

 

[AW10]

AW, According to you, which is more important , the NR bar in Spot Nifty or NF???
Spot Nifty has two continous NR bars and second bar narrower than the first, in fact both bars have the Narrowest range in last 12 Trading sessions (NR12)!!
It is not so in NF, which has a NR4 bar today!!!

RKK, frankly speaking I would prefer NF to track this cause that's what we trade and our analysis shd be based on the chart that we put our money on.

Having said that for NF trading, if we have to find out what overall mkt is doing, what effort is required to collect the data etc then it is OK to look at Nifty.

I use Nifty for ease of data collection in excel sheet (just personal preference). I have written formula's in excel to flag the NRx count for today. Gradually my sheet has grown too big and now helps in my EOD analysis. Input required is just OHLC price of the day and all flags are ready for interpretation.

Happy Trading

 

[Placebo]

Hi Rohan. That's a very interesting approach to trade nr7. I have never traded nifty futures or stocks but just out of curiosity wanted to find out if you guys follow up on the nr7 flagged financial assets.

I trade commodities and its a very common phenomena which repeats time after time. So i just wanted to check with you guys if there is any follow up. This one particular behavior is very rare but extremely productive when nr7 triggers and then the next bar is an inside bar thereby making it nr8i. Some of the best moves have occurred in commodities when nr7 does not respond immediately and keeps consolidating in a narrow range if not narrower.

Anyways thank you for the reply rohan and thanks anup for starting such a wonderful thread. In this game of probabilities nr7 is definitely a tool that every trader should try to have in his/her armory.

Cheers and Happy Trading

 

[mohhnow]

aw10 ji
The NR7 setup explanation has remained very good, under your explanation it has become well explained. It was working out as late as the jump of Nifty from 4940+ -> 5150 with a couple of NR7 days.

Sir, may I ask you to explain WS7, and the related strategies related to the NR7 concept also, and its implication on trend & trading ...

It would benefit many of us greenhorns and the experienced traders.

Wish you, your family, and everyone here a
Very Happy & Prosperous 2010 ...
With regards & respects to you
Moh

 

[AW10]

AW10,
When i backtested NR7 strategy on some stks i was much more concerned for the result/breakout on the next day itself as im purely a intraday player and i dont keep any positions pending for next day.
But still if i had some time then i will try to backtest the same for 2NR7, 3NR7 & 4NR7 days and see the result.
One more logic behind not testing 2,3,4NR7 days is that, though if we get NR7, 2NR7 or 3NR7 days it reflects on our daily watch list and we are just concern abt the breakout on either side and trade it.
if on the 2nd day the stk turn to 2NR7 day, in that instance also we are not getting a valid breakout and we leave the stk on day 1.
automatically on 2nd day its coming in our watchlist and next day we are concern abt the breakout on either side to trade.

there are very few instances when we get 3NR7,4NR7 days. statistically will have to find out the % of days, and result on next day.

Lets c when its poss for me to do this additional homework

Rohan, what I was referring to not 2NR7 or 3NR7 .. but stock that has given NR7 today, no breakout tomorrow but no NR7 as well. So this stock will be off your list tomorrow. Thogh the effect of NR7 is yet to be seen. Inangia was asking about such filtering.

If you are not looking at them now, then it is fine. That is more suitable for Swing trade, I think. My observation is everyday u get atleast 3 to 4 stocks minimum which is sufficient to trade tomorrow.

Happy Trading