Trading NR7 setup

[bandlab2]

Try icharts.in -- they give date range chart BUT data cannot be downloaded in CSV, Excel etc. Am not sure abt Futures chart, spot is easily available.

i tried icharts too, they ont have intraday charts in date range. they give intraday in last N days/months option

 

[chandra_mohan7519]

Hi all,

First of all i would like to thank the senior members and AW10 for this wonderful system. which is very easy to understand for all.

I have seen there is lot of confusion in the selection of data... Spot or Futures... IMO i would prefer to keep spot coz it is easily available to all. Most important thing is i have backtested this system from 1996.. (spot)... it has given very great result... in which these slippage of 10 to 15 points (future points) can be easily taken care...

These are my opinons... if iam wrong.. wish to seek appoligies

thanking you all

happy trading
chandra mohan

 

[HPS]

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 385 in next 2 days.  Notice the range expansion.
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.

Mr. AW10
Can you please expalin, How you calculate that Break of the low of 4561 of NR7 day took it to low of 385 in next 2 days. Notice the range expansion. Please reply, Thanks

 

[myvineet]

Mr. AW10
Can you please expalin, How you calculate that Break of the low of 4561 of NR7 day took it to low of 385 in next 2 days. Notice the range expansion. Please reply, Thanks

HPS,

it is 4385...means when market is in tight range ...from 4636-4561...

& next day it broke lower range & it trend upto 4385....nearly 200 points in 2 days ..

hope it clears now

 

[WOD]

posted mistakenly..

 

[AW10]

Mr. AW10
Can you please expalin, How you calculate that Break of the low of 4561 of NR7 day took it to low of 385 in next 2 days. Notice the range expansion. Please reply, Thanks

Thanks Vineet for providing the clarification.

Thanks HPS for raising your doubt here.I have edited first post to correct it.

On 5th june, Low was 4561. on 6th, the range was from 4611 to 4404. That means if we had placed order to sell at 4561, it would have been executed.

Market fell on 6th / 7th.. taking it down to the level of 4365 giving us opportunity of 200 points range approximately. Based on this setup, different traders can form their own strategy to exploit it.

Happy Trading.

 

[Sunil]

If, from hereon, Nifty Future does not touch 4270 or 4130 (ie 20 pts +/- from HOD/LOD) then WE HAVE AN NR7 TODAY (coupled with NR4-2)

If breaches such 20pts, but remains within 30pts, then a consecutive NR4 today (NR4-2)

Beyond 30pts, game over -

 

[Sunil]

NF 4286 & above = game over

 

[bandlab2]

one simple question. this range contraction means we are in narrow range and the range is getting squeezed. if we have last 6 ranges as 120, 121,119,120,121,118 and today its 116. technically its NR7 but actually there is no contraction !! all numbers are more or less same. for NR7 to be effective we need very good distribution ? like 110, 170,140,200,117,156 ?

sunil, whats NR4-2 ? I understood NR4, but whats this 2 ?

on the flip side, do we have wide range 7 ? opposite of contraction. maximum of last 7 ranges ? does this mean anything ? like we may get into a narrow range now ?

 

[Sunil]

one simple question. this range contraction means we are in narrow range and the range is getting squeezed. if we have last 6 ranges as 120, 121,119,120,121,118 and today its 116. technically its NR7 but actually there is no contraction !! all numbers are more or less same. for NR7 to be effective we need very good distribution ? like 110, 170,140,200,117,156 ?

sunil, whats NR4-2 ? I understood NR4, but whats this 2 ?

on the flip side, do we have wide range 7 ? opposite of contraction. maximum of last 7 ranges ? does this mean anything ? like we may get into a narrow range now ?

2 things:

1. Even though you choose to trade a stock in Cash Market, compute the NR calculation with its FUTURES figures. I have explained the reason in AW10's thread.

2. Not all stocks give consistent results. Recently, when I tried to apply this concept (successful in Nifty) to stocks, I got only 4-5 stocks giving consistent results out of the initial basket of 20 stocks.
A common theme I found was that the range contraction should be evident not only in such EOD calculations but also in their intraday charts.

Spot on, Bala...That is why,
NR4-2 plus IB (Inside Bar)
&
NR7 plus IB
are best combos


NR4-2 means second consecutive day of NR4 day.
Yesterday & today are NR4 days as per FUT chart, while as per Spot chart, there is no pattern related to the topic of the thread.
So, only for tomorrow's intraday purpose, I'll be considering today's HOD & LOD as breakout levels.
Sharp U turns from 4155 & 4275.