Trading NR7 setup

[mave_rick]

Hi Karanm,

The trading with NR7, as the title of this thread says and as mentioned by AW10 and other members, is a setup based on which you will apply your trading strategy.

It is the lowest trading range for a period of last 7 days and we are expecting a range expansion on the following day. The range expansion can be either bearish or bullish.

You can apply any strategy in which you are comfortable with. It can be trend following strategy or a breakout strategy or any other strategy.

The purpose of finding out NR7 scrips is to trade scrips which has a better possibility than others of giving expanded range.

I hope this information helps....

Happy trading....

 

[AW10]

Karanm,

RKK and Mave_rick have already answered the question the way I would have answered.
It is just a setup to how you potential candidates that may offer great trading opportunities on next day. Rest is upto you and your system to encash on these opportunities.

Sir, can you kindly guide how to Enter & Exit trade with NR7 Statergy, what will be the Stop loss.I am asking for Exit point because once you are in Profit, you should definately know where to exit and take maximum Profits as for failure Trades we know our Stoploss and maximum Loss.

I have given a sample trading strategy one of the post at start. But as mentioned above, this should come from your system.

Sir, lastly what success ratio & Risk/Reward we can expect with your NR7 Statergy(as per back testing)

Again, this depends on your trading system, not on this setup. Rohan has posted many NR7 stocks here and also the track record of which one has broken out on next day and which one failed to breakout.

Main advantage of this setup is that your risk on the cases where it failed is less. And when it works, then it gives good expansion. So you can keep your losses small, and still ride big profit.

Happy Trading

 

[Brandon]

I personally try EMA crossover trading on NR7/IB stocks, expecting trending days on those after Narrow range.
First post in the forum, hope that one helps.

 

[rkkarnani]

I personally try EMA crossover trading on NR7/IB stocks, expecting trending days on those after Narrow range.
First post in the forum, hope that one helps.

Please elaborate a bit!!!

 

[Brandon]

Please elaborate a bit!!!

Sure , I will post an example with a volatile stock which we can see in your Previous list made an NR7 day - Unitech ( High 75.2 , Low 73.9)
Now we all know that there can be false breakouts , where it just might breach the H/L of NR7 day and then reverse only to catch you on the wrong foot.
I am expecting a trending day on the NR7 stock which I can trade with minimal whipsaws , as EMAs are my favourite and it works best only on trending days.
Here is how I would have traded Unitech on the 17th.
Am taking the short trade at 75.50 instead of waiting for 73.9. The Triple EMA crossover(3,5,20) is added with another confirmation , MACD crossover with Default settings.

If possible do read this book , probably its already mentioned in this nice thread but wont harm to mention it again ,
Toby Crabel - Day Trading With Short Term Price Patterns
Recently even saw in a blog that there is a rumour the author has not pursued additional printings of the text, believing that it gave away too many of his valuable trading ideas.
If possible also do post other strategies that guys are trading with help of NR7.
A query to the owner of this nice thread. Can you tell of some other methods which helps in shortlisting stocks where we can anticipate breakouts or Wide Range movements.
Happy trading.

 

[rkkarnani]

Sure , I will post an example with a volatile stock which we can see in your Previous list made an NR7 day - Unitech ( High 75.2 , Low 73.9)
Now we all know that there can be false breakouts , where it just might breach the H/L of NR7 day and then reverse only to catch you on the wrong foot.
I am expecting a trending day on the NR7 stock which I can trade with minimal whipsaws , as EMAs are my favourite and it works best only on trending days.
Here is how I would have traded Unitech on the 17th.
Am taking the short trade at 75.50 instead of waiting for 73.9. The Triple EMA crossover(3,5,20) is added with another confirmation , MACD crossover with Default settings.

If possible do read this book , probably its already mentioned in this nice thread but wont harm to mention it again ,
Toby Crabel - Day Trading With Short Term Price Patterns
Recently even saw in a blog that there is a rumour the author has not pursued additional printings of the text, believing that it gave away too many of his valuable trading ideas.
If possible also do post other strategies that guys are trading with help of NR7.
A query to the owner of this nice thread. Can you tell of some other methods which helps in shortlisting stocks where we can anticipate breakouts or Wide Range movements.
Happy trading.

Brandon,
Thanks for sharing your strategy.

You look for EMA crossover and MACD in Daily chart or just the 5 minute Intraday Chart ?

Would it be correct to say that you trade this Setup of EMA 3,5,20 and MACD confirmation only after a NR7 day or you trade it whenever it occurs!

Though it is mostly true that NR7 days are followed by Range Expansion but at times we have a series of NR7 days one after the other. How do you handle such scenarios. Sorry to bother you if you find this query too basic.

All the best.

 

[Brandon]

Brandon,
Thanks for sharing your strategy.

You look for EMA crossover and MACD in Daily chart or just the 5 minute Intraday Chart ?

Would it be correct to say that you trade this Setup of EMA 3,5,20 and MACD confirmation only after a NR7 day or you trade it whenever it occurs!

Though it is mostly true that NR7 days are followed by Range Expansion but at times we have a series of NR7 days one after the other. How do you handle such scenarios. Sorry to bother you if you find this query too basic.

All the best.

Hey, no probs man , the pleasure is all mine.
I am looking at the indicators only on the 5 min chart as am intraday trader. Never tried the NR7-Indicator Combo on Daily charts , so cant tell about it.
Yes , you are exactly right that am looking for the setup ONLY after NR7 days.
Am not a pro trader yet , so yeah you guessed it , series of NR7 and my tight Stop Losses starts get hitting. :lol: Did not want to comment about Exits/Stop Losses as this will differ from trader to trader depending on their Risk appetite and Money management.
Any EMA system is certainly going to be badly affected by Narrow range or Whipsaw days , so if I say here I only choose the trending trades , it will be a blatant lie. But the good thing is that if you have a good Risk:Reward ratio , the few winning trades in EMA systems should cover the small loosing trades and put you in green.
Will be looking forward to see other strategies or are they already posted in this thread? Havent got around to read the whole thread yet , read only the first page.
Happy Trading guys.

 

[Brandon]

There is some magic on this board, ppl so easily share their strategies without reservation. Brandon has just joined the Forum and wow, thanks a lot Brandon.
I have a query :
01. What software did you use to post the chart!!
02. Chart shows 3,8, and 20 but in Text it is 3,5,and 20 which is correct?
03. Two queries already posted by rkk.
Thanks and regards.
-Shravan

You are welcome Shravan. I share as its not like that if I share my strategies here , the very next day am going to loosing money just because I shared some strategies the other day. I was a novice too and would have reached nowhere had others not helped me . You are a senior member here for almost 3 years , so I am sure you have posted some strategies here too for benefit of others. So many good threads here , will take some time to go through all of them.
1. I used Google Finance charts. I trade from Office(not yet knowledgable to go fulltime professional ) so not possible for me to install any extra software , though I do track EOD charts in Amibroker.
2. Its your choice you can do whichever suits you better , I mess around with 3 , 5 , 8 , 13 , 20/21. Yes , you are right, they are Fib numbers.
3. Already posted.

 

[AW10]

A query to the owner of this nice thread. Can you tell of some other methods which helps in shortlisting stocks where we can anticipate breakouts or Wide Range movements.
Happy trading.

NR7 is just one of the breakout trading setup. There are many other breakout trading setups - bollinger band, ATR range, chart patterns like - Ractangle, triangle etc. multi-timeframe breakout etc.
They all have some approach of identifying the congestion and then get ready to benefit from the breakout.

Hope this helps.
Happy Trading

 

[AW10]

Brandon, Thanks for sharing the chart and your appraoch to trade Nr7 breakout using "EMA crossover system".

Do you have more specific rules for EMA crossover system covering exact entry, initial stops, trailing stops, scale-in etc. ? Not sure if you would like to share them here.

IMO, EMA crossover is typical, trend following system..and that suits perfectly to trade the breakout.


@RKK, some of your questions are already answered by Brandon. I am expressing my thoughts on this section.

Though it is mostly true that NR7 days are followed by Range Expansion but at times we have a series of NR7 days one after the other. How do you handle such scenarios.

IMO, if that happens (i.e. no range expansion or range breakout), then our stops will be hit and we move on to next trade.
You can very well use pivots high/low to put initial stop and to chase the trend by moving stops from pivot to pivot.
If you fancy, Parabolic SAR then use that to drive your stops.

Important is to have exit plan defined. Breakout trading has higher failure rate, but that shouldn't bother us as long as we squeez the max from successful breakout. Anyway, trading is not about being RIGHT.. but about managing risk and profits. So why worry about failed breakout. Just define our rules that tells us that breakout has failed and exit the trade there.

Hope this helps.
Happy Trading