Trading NR7 setup

[AW10]

Bandlab, you are right.. NR7 is great concept / trading setup.. that is why I named this thread at NR7 SETUP...not as NR7 trading system..

I am conciously staying away from developing a trading system cause it has to be done by trader to meet his/her personal requirement. I gave a sample plan as draft which should help trader to take it to next step and develop profitable trading system based on this setup. There are many ways in which one can trade it and I mentioned that in second and third post (maybe I shd revisit them sometime and see if they need any amendment).

As I don't believe in spoon feeding to an adult, hence I have no plan of giving a tradable rule book here.. but I am willing (and have been) to help people who want to take it to next level.

Hope you see my point here.
Happy Trading

 

[AW10]

Hi Aw10. In false breakout you mentioned

break-out of the range/ level but price comes back to the range/ level.

What i have observed is that all bars which move back into the range and get their top tailed are not bearish. This is just a case of supply swamping demand.

However all false breakouts close below the midpoint of the trading range on increasing volumes and spread indicating selling pressure. This close could be either the same bar or a couple of bars after that.

Just my 2 cents

Cheers
Happy Trading

Inangia, thanks for your input on it. I agree with u. I will update my post after few days (hope I get some more feedback till then).

IMO, if demand is struggling to match the increased supply above breakout level (in case of bullish breakout) and we see upper tails, wide red bars, increasing volume in red bars after the breakout.. then these are signs of false breakout. Yes price can come back in trading zone. Rather then looking for 50% of range, 62% of range etc, I would prefer to look for the break of Pivot Low/ Swing low there. I trust the price turning points visible on chart more then any arithmetically calculated numbers..

But if demand is high and it can absorb the new supply, then price will not break the prev swing/pivot low or the range. Infact in such case, demand will keep absorbing the supply during the retracement and we will have small range bars indicating close fight of bulls/bear.

And yes, this price action can take few bars. Hence I would extend my post and mention about this as well.

Thanks again for your feedback.
Happy Trading

 

[Placebo]

Hi Aw10. I totally agree with you about looking at price action rather than looking at an mathematical equation or number.

However from an intra day perspective this poses a gigantic problem. Each time frame shows a trend in a different way. What i mean by this is that a higher time frame would show a trend and a correction however if you scale down the time frame then the previous counter trend looks like formation of a new trend. This creates a support/resistance zone in our perception.But still leaves the question wide open as to where the support/resistance levels are. The only fact available to us is where the trading range is. Hence to simplify things i use the midpoint of the trading range to see where pressure is increasing or decreasing.

The financial markets by its very nature has to be fed with losers so the break of every swing point low will catch stop loss orders and trigger a chain of selling. This also brings in fresh new shorts and triggers reverse orders. But this is the time when the market has a higher potential of moving up as strong and weak holders are on the wrong side of the trend. Richard D Wyckoff had termed this as a shakeout.

And in most cases a shakeout moves below the 50% of range level and then closes above it.


Looking forward to hear your views.

As time permits i'll put up some charts of wyckoff's schematics and try to explain the places of catching economic dis-equilibrium.

Cheers
Happy Trading

 

[rohangawale]

NR7 Stocks Triggered on 18th Nov:

[B]STOCK		HIGH		LOW[/B]
NIFTY		5079.3		5041.65
ACC		736.00		722.10
AXIS BANK	1005		993.75
BPCL		520		510
DLF		384		372.35
GAIL		393.45		384.5
HDFC		2749.1		2715
HINDALCO	135.75		133
HIND UNILEVER	278		274.45
ICICI BANK	918		901
NTPC		215.4		213.55
SBI		2358.95		2315
SUZLON		74.5		72
TATA POWER	1334		1311.05

NR7 Stocks close on 19th Nov:

		[B]18-Nov			19-Nov	
STOCK		HIGH	LOW		Close	Trigger[/B]
NIFTY		5079.3	5041.65		4989.00	Down Break
ACC		736.00	722.10		733.35	No Breakout
AXIS BANK	1005	993.75		986.55	Down Break
BPCL		520	510		507.90	Down Break
DLF		384	372.35		366.25	Down Break
GAIL		393.45	384.5		387.20	No Breakout
HDFC		2749.1	2715		2744.75	No Breakout
HINDALCO	135.75	133		130.10	Down Break
HIND UNILEVER	278	274.45		275.50	No Breakout
ICICI BANK	918	901		886.45	Down Break
NTPC		215.4	213.55		213.55	No Breakout
SBI		2358.95	2315		2281.35	Down Break
SUZLON		74.5	72		75.20	Up Break
TATA POWER	1334	1311.05		1318.85	No Breakout

 

[bandlab2]

Bandlab, you are right.. NR7 is great concept / trading setup.. that is why I named this thread at NR7 SETUP...not as NR7 trading system..

I am conciously staying away from developing a trading system cause it has to be done by trader to meet his/her personal requirement. I gave a sample plan as draft which should help trader to take it to next step and develop profitable trading system based on this setup. There are many ways in which one can trade it and I mentioned that in second and third post (maybe I shd revisit them sometime and see if they need any amendment).

As I don't believe in spoon feeding to an adult, hence I have no plan of giving a tradable rule book here.. but I am willing (and have been) to help people who want to take it to next level.

Hope you see my point here.
Happy Trading

i agree with you AW10. i think we need to incorporate this concept into our own trade plan which is comfortable to each of us.

 

[rohangawale]

NR7 Stocks Triggered on 19th Nov:

[B]STOCK		HIGH		LOW[/B]
BHARTI		296.85		291.3
BHEL		2,274.70	2,250.00
GAIL		389		382.1
M&M		1028		1005
POWERGRID	105.5		104.1
TATA POWER	1328.9		1311
WIPRO		654.4		640.25

 

[AW10]

thanks CCMB for sharing the trading strategy for NR bars. Infact the entry rules are same as what I have givne in my draft strategy.

There are many possible exit systems possible... Chandelier exit is one of my favourite too for positional trades. It incorporates the volatility (thru ATR) very well in the system.
It is great exit when u want to live with the trend..But as breakout is more of quickie trades, I prefer to use faster exit method. I follow multiple moving average based approach to be with the trend and scale-in /scale-out based on them.

Happy Trading.

 

[rkkarnani]

This link is courtsey Shravan (ccmb420).

Its a "must" read!!! The concept is very nicely explained, as if AW10 himself is elaborating on what he has written.

http://www.ferrowolf.com/?page_id=357

 

[AW10]

Thanks RKKarnani for sharing this link.
I could see replication of my msgs there.. (I haven't seen that earlier and that is not my site). Good to see someone else in the world thinking like me.

Happy Trading

 

[rkkarnani]

Thanks RKKarnani for sharing this link.
I could see replication of my msgs there.. (I haven't seen that earlier and that is not my site). Good to see someone else in the world thinking like me.

Happy Trading

This just reinforces the value of NR Trading (words of Shravan a few posts back!!) :clap: