Trading NR7 setup

[AW10]

What happening now, is it a genuine NR7 breakdown.....looks like so.....please comment guys......

Sorry WOD for late reply to your point.
Breakdown from NR7 range low of 4115 of Tuesday is breakdown without any doubt.
whether the downfall is over or not, only mkt can tell us.. but certainly till today, we had almost 80 pts down move.

Lets listen to the market and decide what it is going to tell us tomorrow.

Happy Trading

 

[WOD]

Sorry WOD for late reply to your point.
Breakdown from NR7 range low of 4115 of Tuesday is breakdown without any doubt.
whether the downfall is over or not, only mkt can tell us.. but certainly till today, we had almost 80 pts down move.

Lets listen to the market and decide what it is going to tell us tomorrow.

Happy Trading

Dont be sorry AW, I listened to the market and trusted NR7 with my SMA's and kept my PE in trade and still holding......we have NR7 today also and most probably its all gonna be down tomorow....

 

[AW10]

AW10, have you ever tried applying NR7 on 5 min chart? if yes then have you observed any +ve results?

I have tried to do the same, but did not have any success with it.

My views on NR concept on shorter timeframe -
Concept of contraction and expansion are valid in all timeframes. Each timeframe has its usual trading range. On shorter TF, the contraction will result in expansion but it may or maynot have really big expansion. Moreover, price action gets more erratic and hence success rate of pattern falls on shorter timeframe.

So we need to look at larger TF and get bigger picture of what market is doing.

Because of above logic, I have never tried to apply it on smaller TF. I look at Weekly/daily and sometime on 60m chart for NR study. (We had NR4/NR7 week on last week which was broken on Monday giving us 300/350 points opportunity so far).

Maybe you can backtest it on shorter TF and share the result with all of us.

Happy Trading

 

[AW10]

Dont be sorry AW, I listened to the market and trusted NR7 with my SMA's and kept my PE in trade and still holding......we have NR7 today also and most probably its all gonna be down tomorow....

WOD, do not predict that it will go down tomorrow but like a Pro trader, be prepared with your action plan for 1) if it breaks on upside 2) if it continues the fall or 3) goes sideway for another day.
Two NR days in close proximity indicates that market is trying to make up its mind hence indicision phase is resulting in NR days.
Once it makes up the mind, then we just got to follow it.

Lets not forget that we are near strong psychological support level of 4000, 50 dma is nearby etc. Selling near support is not what professionals do. They sell at the resistence and buy at the support. Whereas novice traders do the opposite.

Happy Trading

 

[AW10]

Hi Dear AW10 as you said about contraction/expansion of market here i m attaching a chart with my views plz correct .........

Before budget market goes into consolidation mode /indecission forming a triangle then on friday we had a break out anticipating a good budget etc but on budget day we had a break out failuer and we again trade .... and that is now in profit .......

So when we get a consolidation pattern/sideways movement then can we expect that some move is comming ....?? and can trade for some time .... as market has already spent time in indecission mode now it will try to move ??

Satya, You are right in explanation that before budget mkt went into consolidation (sign of indecision) during last week. It was shown by 2 NR7 days / NR4 on weekly chart etc. There are many other indicators / patterns to get the same message. Triangle, flags are some of the popular ones as u have already highlighted the flat top ascending triangle.

Such consolidation always result in breakout/breakdown when market participants finally makeup their mind.

Happy Trading

 

[lazytrader]

Just to clarify the difference between , Daily Range and aTR (Average True Range)

Daily range just looks at difference of Day's high and low.

ATR is derived from the True Range which is the greatest of the following three values:
1) difference between the Today's high and low (i.e. daily range)
2) difference between the Previous Close and Today's High
3) difference between the Previous Close and Today's Low.

That means, ATR does take into consideration the opening gap.
So when we a day with wide gap but then for the whole day the action was in narrow range, we might get a NR signal.. but on ATR front it might still show as high ATR day.

With this background, I would not use ATR to identify NR days.

Happy Trading.

I think you misunderstood me. Let me explain...

What I was trying to say is that if we had a 74 pt range 6 days ago then a 75pt range would not signal a NR7 (using automated signals/ formulae). Having a atr of around 140 and a single day range of about 75 pt is significant. It seems to give a better sense of days range compared to recent volatility.

 

[lazytrader]

My views on NR concept on shorter timeframe -
Concept of contraction and expansion are valid in all timeframes. Each timeframe has its usual trading range. On shorter TF, the contraction will result in expansion but it may or maynot have really big expansion. Moreover, price action gets more erratic and hence success rate of pattern falls on shorter timeframe.

So we need to look at larger TF and get bigger picture of what market is doing.

Because of above logic, I have never tried to apply it on smaller TF. I look at Weekly/daily and sometime on 60m chart for NR study. (We had NR4/NR7 week on last week which was broken on Monday giving us 300/350 points opportunity so far).

Maybe you can backtest it on shorter TF and share the result with all of us.

Happy Trading

I've tired checking for wrb and NR on shorter TFs. It's hard to implement since on a shorter timeframe the number of NR bars (5/7) seem insignificant. A better indication would be to use atr derivatives like Keltner Channels etc. I find Bollinger Bands very useful which I always put on my chart. It will immediately give you an idea about the volatility and strength of a move. I use a 10,2 on a 5min chart. Try it out and tell us what you feel.

 

[lazytrader]

Hi LT

Am carrying 2 lots of Put 4000, bought at 100 closing was at 105, do you find it risky ??? will there be a GAP Up??

bit worried

best regards
Aqua

Aqua, don't worry about what you read on forums and what people say. You have a strategy, follow it. If you have SL and targets stick to them. I can't predict what is going to happen and I won't even try. I am watching for 4040 and 4140 on spot. In between I am neutral since we haven't been able to break above 4100 or breakdown in to the gap.

If you really want my opinion then it is hold the puts. The trend seems to be bearish since the budget but the pauses day before and today got me thinking since I was expecting a free fall below 4150. So frankly I don't know what will happen.

 

[WOD]

I've tired checking for wrb and NR on shorter TFs. It's hard to implement since on a shorter timeframe the number of NR bars (5/7) seem insignificant. A better indication would be to use atr derivatives like Keltner Channels etc. I find Bollinger Bands very useful which I always put on my chart. It will immediately give you an idea about the volatility and strength of a move. I use a 10,2 on a 5min chart. Try it out and tell us what you feel.

Thanks for sharing this LT.....I will try out for sure on 5 min and will tell you my results...

 

[Sunil]

Thanks for sharing this LT.....I will try out for sure on 5 min and will tell you my results...

This post by ST may be helpful to you...

Though I haven't studied it, I am a bit skeptical and would agree with AW10 about 5min TF and NR7.

That is why, for intraday purpose, I study only 60min chart for NR4/7/IB trading.

I had decided to wait for few more days before asking ST abt his personal experience with NR & 5min.