Trading NR7 setup

[Phani333]

Dear Aw10,

Really Appriciate your efforts for sharing such a simple yet powerful Strategy.. I am new to trading But, read the entire posts on NR7, and felt that it perfectly suits my trading style. I Collected the afl on NR7 by anant :clap:, and did some changes to that so that we can easily identify the nr7 on the price chart.

And After going through the posts, i took my charts and observed the NR7's on it & came to some intersting conclusions.

which are

1) nr7 so powerful when it occurs after a rally or Decline. I mean when we enter after such situations the price moved in favor of our strategy & it never hit the Stoploss. if required i can post the charts here to confirm.

2) Yes NR7 is the Smallest range in the last 7 bars but before starting to trade the NR7 we need to have a look on the other 6 days ranges also. By seeing them we can avoid false breakouts..

thats all for now, and will post here if i find any good piece of information on the charts.

Regards,
Phanindra.Y

 

[AW10]

Thanks Phanindra for your feedback.

Looking forward for more input from you.

Happy Trading.

 

[sujittalukder]

I have a query to seniors/experts.

How to compute 6/100 day HVR?
Can this be calcualted in Excel, if yes, whats the formula?

Which TA software provides 6/100 day HVR chart?

Thanks and regards

Sujit

 

[kenneth]

I have a query to seniors/experts.

How to compute 6/100 day HVR?
Can this be calcualted in Excel, if yes, whats the formula?

Which TA software provides 6/100 day HVR chart?

Thanks and regards

Sujit

Hi Sujit,

Amibroker has this formule in their library

Formula URL: http://www.amibroker.com/library/formula.php?id=115
Regards
Ken

 

[sujittalukder]

Hi Sujit,

Amibroker has this formule in their library

Formula URL: http://www.amibroker.com/library/formula.php?id=115
Regards
Ken

Thank you for the reply.

But, the link is not working.
regards
Sujit

 

[Phani333]

Thanks Phanindra for your feedback.

Looking forward for more input from you.
Happy Trading.

Thanks AW10, ( may i know your name please, just curious to know for your encouraging words.

After going through the charts what i have observed is, if the range on NR7 day is less than 0.7% to 1.5% of the close it's like a compressed spring, and at this point when we enter into a trade based on the stategies you discussed at the beginning, the chance for it becoming a profitable one is High.

Here are some of the charts on which we can observe the range on NR7 day is less than 1%.

 

[Phani333]

Same observation on Adani Enterprsies.

On 16/04/10 the NR7 range of adani is 6.85 which is around 1.5% of the close. If you observe the previous day's ranges interestingly the last 4days range is continously decreasing, this kind of entry conditions makes the NR7 setup highly probable one.

 

[kenneth]

Thank you for the reply.

But, the link is not working.
regards
Sujit

Sujit,

Amibroker Library is now for the registered users


_SECTION_BEGIN("NR4 Historical Volatility System");
//------------------------------------------------------------------------------
//
// Formula Name: NR4 Historical Volatility System
// Author/Uploader: Daniel Ervi
// E-mail:
// Date/Time Added: 2001-09-08 17:28:09
// Origin: Street Smarts, Connors and Raschke. Also featured in TASC.
// Keywords: NR4 volatility
// Level: medium
// Flags: exploration
// Formula URL: http://www.amibroker.com/library/formula.php?id=115
// Details URL: http://www.amibroker.com/library/detail.php?id=115
//
//------------------------------------------------------------------------------
//
// Connors and Raschke NR4 Historical Volatility System. Compares the 6 day
// volatility to the 100 day volatility. When this ratio drops below 50%, a
// buy stop and sell stop bracket the current price, expecting historical
// volatility to revert to the mean. Four day Narrow-Range (NR4) and Inside
// Day patterns are used to filter the trades to increase probabilities. For
// further explanation, refer to "Street Smarts" from Connors and Raschke.
//
//------------------------------------------------------------------------------

/* Connors and Raschke Historical Volatility System
For further explanation, refer to "Street Smarts"
from Connors and Raschke.
Ported from Metastock code by Daniel Ervi */

//NumColumns = 5;
SetChartBkGradientFill( ParamColor("BgTop", colorLavender),ParamColor("BgBottom", colorBlack));
_SECTION_BEGIN("Price1");
SetChartOptions(0,chartShowArrows|chartShowDates);
_N(Title = StrFormat("{{NAME}} - {{INTERVAL}} {{DATE}} Open %g, Hi %g, Lo %g, Close %g (%.1f%%) {{VALUES}}", O, H, L, C, SelectedValue( ROC( C, 1 ) ) ));
Plot( C, "Close", ParamColor("Color", colorBlack ), styleNoTitle | ParamStyle("Style") | GetPriceStyle() );
_SECTION_END();
VolRatio = StDev(log(C/Ref(C,-1)),5) / StDev(log(C/Ref(C,-1)),99);
Column0 = VolRatio;
Column0Name = "VolRatio";

NR4Day = (H - L) < Ref(LLV(H-L,3),-1);
//Column1 = NR4Day;
//Column1Name = "Nr4Day";
NR7Day = (H - L) < Ref(LLV(H-L,6),-1);

InsideDay = H < Ref(High,-1) AND Low > Ref(Low,-1);
Buy = VolRatio < 0.5 AND (NR7Day == 1 AND InsideDay == 1);
Sell = VolRatio < 0.5 AND (NR7Day == 1 AND InsideDay == 1);

//shape = Buy * shapeSmallCircle + Sell * shapeSmallCircle;
//PlotShapes( shape, IIf( Buy, colorBrightGreen, colorRed ),0, IIf( Buy,High,Low ) );

dist = 2.0*ATR(10);
for( i = 0; i < BarCount; i++ )
{
if( Buy ) PlotText( "NR7Buy\n@" + H[ i ], i, H[ i ]+dist, colorGreen );
if( Sell ) PlotText( "NR7Sell\n@" + L[ i ], i, L[ i ]-dist, colorRed);
}

//Column2 = InsideDay;
//Column2Name = "Inside Day";

//Column3 = High + 0.125;
//Column3Name = "Buy Stop";

//Column4 = Low - 0.125;
//Column4Name = "Sell Stop";

Filter =VolRatio < 0.5 AND (NR4Day == 1 AND InsideDay == 1);
Buy = Filter;
//AddTextColumn(FullName(), "Company Name");
AddColumn(Buy, "Buy", 1);
AddColumn(C, "Close", 1.3);
AddColumn( VolRatio, " VolRatio");
AddColumn(Nr4day, "NR4day");
AddColumn(Nr4day, "NR7day");
AddColumn(InsideDay, "insideday");
AddColumn( High + 0.125, "BuyStop");
AddColumn(Low - 0.125, ",SellStop,");
Regards
Ken

 

[alroyraj]

Dear Aw10,

Really Appriciate your efforts for sharing such a simple yet powerful Strategy.. I am new to trading But, read the entire posts on NR7, and felt that it perfectly suits my trading style. I Collected the afl on NR7 by anant :clap:, and did some changes to that so that we can easily identify the nr7 on the price chart.

And After going through the posts, i took my charts and observed the NR7's on it & came to some intersting conclusions.

which are

1) nr7 so powerful when it occurs after a rally or Decline. I mean when we enter after such situations the price moved in favor of our strategy & it never hit the Stoploss. if required i can post the charts here to confirm.

2) Yes NR7 is the Smallest range in the last 7 bars but before starting to trade the NR7 we need to have a look on the other 6 days ranges also. By seeing them we can avoid false breakouts..

thats all for now, and will post here if i find any good piece of information on the charts.

Regards,
Phanindra.Y

Could you post the charts,it would be good to clear any remaining doubts I have. Can you give an example of the days in which the nr7 occured.
And I have seen that the nr7 need not occur at regular intervals and some days the lowest range occurs at a gap of a few days (13 ,16 ,21 April 2010)
is that what you are referring to as false breakouts?
At present I am trying to validate this through excel so kindly bear with me or if you have in excel it would be better.

 

[AW10]

Chk out this post and the links posted there. They should help you in developing your strategy to trade NR7.

http://www.traderji.com/advanced-trading-strategies/29825-trading-nr7-setup.html#post323039

all the best and happy trading