Trading NR7 setup

[mohhnow]

with the rates at NSE, the opening rates are influenced by the spike in the start, but it is taken as the Low for the day.
That increases the span range of the day, thus NOT making yesterday & today as narrowRanges ... ??? When the NSE data is entered in the excel ...
Should we ignore such initial blips ?
If so, it becomes imperative to notice such blip in intraday very small timeframes and manually enter it, making it error prone ...
So, the question is - whether to approach tomorrow as nr4, and if so, then take which value for Low, and thus the Break Down level ...

 

[mohhnow]

And, this very same Low value given in NSE also keeps affecting the Pivot, Support, Resistance levels.
Todays Low is 5242.40 [NSE] or 5259.50 [regular, ignoring the 1st minute]

 

[Sunil]

with the rates at NSE, the opening rates are influenced by the spike in the start, but it is taken as the Low for the day.
That increases the span range of the day, thus NOT making yesterday & today as narrowRanges ... ??? When the NSE data is entered in the excel ...
Should we ignore such initial blips ?
If so, it becomes imperative to notice such blip in intraday very small timeframes and manually enter it, making it error prone ...
So, the question is - whether to approach tomorrow as nr4, and if so, then take which value for Low, and thus the Break Down level ...

I have always stuck to Future rates for NR calculation, as those levels are actual traded prices.
Spot Index calculation can be incorrect at times, due to freak trades in any of its major constituents.
NSE has some policy of calculating Nifty spot's OPEN price, which almost all times is close to its PREV CLOSE price.

 

[AW10]

I agree with Sunil's view Moh. NF prices area more reliable for the reasons/issues that you have highlighted.

Spot prices are fine if you are using NRx to just track of the mood of the market.
I use spot prices cause data is easily available and it is easy to do data crunching on them for longer period.

To handle the issue that u have mentioned, It is better to track 10day average range as well and compare today's range with this number. And if, today's range is <80% of 10day average, it can be called as NR days. And then use the findings generated by above 2 approach to form your view. eg - today's range is 46 points whereas 10d average range is 65. i.e. today's range is 66% of average.. So the message is loud and clear.

You might come across same issue in NF as well where today's price is few ticks out of yesterday's price range.. and theoratical calculation will start calling today as WS day.

Somewhere we need to start adjusting our approach for reality and find the workaround.

Happy Trading

 

[mohhnow]

Thanks aw10, thanks sunil,
both of you experienced seniors have put this in its perspective.
I wil ignore the blips, try locate the logical Low, High from the intra tick, will look for <66% to define the nr definition.

sunil ji, last weekend happen to go thro the 2652 and your input there.
aw10, since linkon7 came up with a delta strategy, i downloaded your Option thread, very interactive sessions you have had with lazytrader & danpick. Quite enormous material, will take a few months for proper absorbing for me...

You people have been taking tremendous efforts while being occuppied with your professions, the threads are running across few years ie. many months ...!

 

[AW10]

It is rare see 3 to 4 NR7 days in a row. What is important for us trader is to find out what happens on the right side of these days. Here is my finding from the history..

9/10/11 June-04 --> Nifty was in 1500 to 1550 range. On break of this, it went down to 1450 (3%) level and reversed then never seen that level again

5/6/8 Sept -05 --> Nifty was in 2456 to 2415 range. Broke up and went to 2660 (8%) level and came back and tested 2300 (15%+) level and then went up

28/29dec/2 Jan-07 --> Nifty was in 3950 to 4000 range . Broke down to 3825 (3%) level and came back to retest and dropped again to 3500 (10%+) level

22/23/29/30Dec - to 4/5 Jan 10 -- Current
Going by the prev logic, we can very well see mild breakout of 3 to 4% (5200+150 = 5350) move in one direction and then another 10%+ move thereafter in other direction (4700). For bullish breakout, next two waves could be upto 5350 level and then to 4700 level. And if we see bearish breakout then 5050 now and then to 5700.
Looking at all other factors, in my view, odds are high for 5350 and then sub 5000 levels.

Just the big picture opinion of mine which can go wrong as well. So form your own big picture and trade what u see on the chart..

Happy Trading

 

[mohhnow]

sir, also a possible chance for an evening doji star ... strengthening your hypothesis

 

[rkkarnani]

It is rare see 3 to 4 NR7 days in a row. What is important for us trader is to find out what happens on the right side of these days. Here is my finding from the history..

9/10/11 June-04 --> Nifty was in 1500 to 1550 range. On break of this, it went down to 1450 (3%) level and reversed then never seen that level again

5/6/8 Sept -05 --> Nifty was in 2456 to 2415 range. Broke up and went to 2660 (8%) level and came back and tested 2300 (15%+) level and then went up

28/29dec/2 Jan-07 --> Nifty was in 3950 to 4000 range . Broke down to 3825 (3%) level and came back to retest and dropped again to 3500 (10%+) level

22/23/29/30Dec - to 4/5 Jan 10 -- Current
Going by the prev logic, we can very well see mild breakout of 3 to 4% (5200+150 = 5350) move in one direction and then another 10%+ move thereafter in other direction (4700). For bullish breakout, next two waves could be upto 5350 level and then to 4700 level. And if we see bearish breakout then 5050 now and then to 5700.
Looking at all other factors, in my view, odds are high for 5350 and then sub 5000 levels.

Just the big picture opinion of mine which can go wrong as well. So form your own big picture and trade what u see on the chart..

Happy Trading

AW, Are your observations above based on Nifty Spot!!!? I seem to locate a few more continous 3/4NRx days in NF!!! Hopefully not erring!!
Can upload NF EOD data from inception for Metastock!!!? or post it in Excel file, if that helps!!

 

[rkkarnani]

24Dec2009 : Range : 73, 10 days Average True Range 88
29Dec2009 : Range : 50, 10 days Average True Range 84
30Dec2009 : Range : 44, 10 days Average True Range 80
31Dec2009 : Range : 38, 10 days Average True Range 78
04Jan 2010 : Range : 37, 10 days Average True Range 75
05Jan 2010 : Range : 32, 10 days Average True Range 73

 

[AW10]

AW, Are your observations above based on Nifty Spot!!!? I seem to locate a few more continous 3/4NRx days in NF!!! Hopefully not erring!!
Can upload NF EOD data from inception for Metastock!!!? or post it in Excel file, if that helps!!

RKK for this 3 continuous NR7 research, I just looked at EOD data of Nifty SPOT.

There might be more occurances in NF (not to rule out the chance of error in my observation), would appreciate if you can post their dates and then we can find out what mkt did after those days of extended consolidation.

My gut feel is that the findings/message might not be very different for even other dates.

Happy Trading