Trading NR7 setup

[rohangawale]

NR7 stocks close on 29 Sept:

STOCK		CLOSE
ACC		814.95
AMBUJA		99.2
HINDALCO	126.9
ICICI		866.35
SBI		2092
TATA MOTORS	592.2
STERLITE	750.25

As H/L of 25th not taken by me so was not able to post with that figures.

 

[rohangawale]

NR7 stocks triggered on 29th Sept:

STOCK		HIGH		LOW
AXIS BANK	929.7		916
DLF		435		425.3
HERO HONDA	1670		1645.15
INFOSYS		2300		2273.2
M&M		869.7		848
NATIONAL ALUM	353.8		344
REL INFRA	1224		1203
SUZLON		93.7		91.8
TATA STEEL	510		502.1

 

[Aqua9]

Arun,
This setup is breakout from consolidation, and many a time, it takes more then one bar to breakout.. or it is also possible that we might get caught in false breakout.
Last week was one of the narrowest week.. (weekly range 132 against 10w average range of 211).
In such tight range market, it is possible that there will be false breakout..

NR4/NR7 is a setup that tells u something about what mkt is doing now and what is possible in next few days.
So that you are well prepared to benefit from the opportunity that is just around the corner.


Lets look last 3 tight weekly range of the past and after-effect of that..

		Weekly range		10wk average range 
1) 31/Aug 		159 			270
    Upper Breakout of this range at 4736 took the market to 5030 level.  (300 pts opportunity)
2) 29/June 		190 			315
    Down Breakout of this range at 4250 took the market to 3920 level. (330 pts opportunity)
3) 24/Feb		120			198
     Down Breakout of this range at 2658 took the market to 2550 level.  (100 pts followed by 2400 pts)
     But the reversal from there and then upper break of this range at 2798 is 
     still continuing.

So use the signal given by this setup and draw your own strategy to benefit from it. By their nature, breakout trades have low success rate, hence we need to be prepared to accept that and every breakout will not work.. But over a period of time, it does work. Due to Narrow range, your stops are tight. So loose less but when u win, the size of opportunity is significant provided ur systems know how to ride the trend.

Happy Trading

Hi AW10

Thanks, am sure your views carry lot of weight age.
Would like some guidance on current strategy that you follow in such instance of sideways market trade/

regards
arun

 

[columbus]

The Bullish trend is in tact.we had 9-EMA crossover
16 sessions back.

 

[AW10]

Arun, in such scenario, I don't attmept to predict the direction of breakout but certainly watch for break and retest of NR zone. If the retest fails and price could not enter or cross the zone but reverses in the direction of break.. then that is the place to enter the trade with stop at the other end of the range.

Or, I use options to create direction neutral position, i.e. buy call, buy put (strategy called Long straddle or Long strangle). And as market breaks out and confirms the direction, then I close the loosing leg and accumulate more position on the winning side.

I have discribed in first few posts of this thread about how to trade breakout.

Happy Trading

 

[Hari]

HDIL , M&M , RELINFRA ,TATASTEEL have Inside Day with Narrowest Range in 7 days(ID/NR7). Hoping to see a good Expansion.

 

[bandlab2]

Welcome back Bandlab2, Haven't seen yr posts here from long time.
Hope yr trading is going well.

Your setup rules looks fine to me. except


NR7 is for catching the consolidation/contraction. If it happens within prev bar, giving us Inside bar, it is fine.. but that doesn't mean that consolidation beyond prev bar range is not valid.

So I would remove this condition.. or reduce its importance from MUST to more flexible.

What about exit rules.. How about putting the target of breakout equal to the width of consolidatation range. Atleast u can get 1/2 position out there and trail remaining position using Pivots .. or set a second target as next PH/PL depending on the direction of break.

Happy Trading.
Do u have any feedback about results..

Hi AW10,

I was busy with other activities, so couldnt post much, but silently reading this thread

In 15 min, the contraction/expansion doesnt work the same way as in EOD. because of smaller TF, i added one more filter - inside bar. This is what i want. i need 5-7 trades a day, thats all. no more no less. and these 5-7 must have good hit rate. since our RRR is 1:2, then even 2 hit target we are above BE. Also i run this against my favorite 50 stocks which consists of all the regular culprits like icici, dlf, ril, sbi, unitech, jpass, axis, relcap etc

I did this with 3 flavors. NR7, NR8, NR7i where NR7 is current bar is lowest in last 7. NR8 is current bar is lowest in last 8 AND prev bar is NR7. NR7i also called as IDNR7 is current bar is inside bar and prev bar is NR7

out of these 3, NR7i gave better results. and main thing fewer signals with good hit rate

since we have so many filters, chances are better

just my way of using NR7 concept

 

[AW10]

Excellent feedback Bandlab2. I never applied this for intraday trading so this feedback adds to my understanding of NR7 on intraday trading.

Happy Trading

 

[cchitra1972]

thanx a lot for the useful and clearcut advice. hope to benefit from it. thanx

 

[scorpio77]

Hi AW10,

Axis bank has finally broken out after a series of NR7 signals.

Looking at the compression zone on the charts, it looks like there is a lot of steam left.

How does one decide a target for this stock? Attached charts daily and 10 min