InvestorQ : what is NR4 and NR7 and how make use
rabindra narula made post

what is NR4 and NR7 and how make use

Answer
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Priyanka N answered.
1 year ago


NR is an abbreviation for Narrow Range. The NR4 and NR7 help the trader to determine the lull in the market so that you catch the big positive or negative storm well in advance. The lull gives you the time and flexibility to execute the trade ahead of the big action point. The assumption in NR4 and NR7 is that the market goes through regular contraction and expansion cycles as part of their movement.

The NR4 and NR7 strategy is a lot of patience for the trader as they need to wait for markets to enter into contraction. In other words, you wait for the range of the bars to reduce. Once NR4 or NR7 is spotted in the chart, a bigger directional price movement is perfectly possible. A classic example is a breakout and reversal pattern wherein you can profit after a range.
NR4 and NR7 refer to the number of days; i.e. 4 days and 7 days in the case above. These are breakout based methods that assume uptrend or downtrend only after consolidation in a narrow range. Let us look at NR7 first. For NR7 the default period is 7 days and if the price range of any particular day is lowest as compared to the last 7 days then that day is NR7 day. Now let us turn to NR4. In this case, the default period is 4 days and if the price range of any particular days is lowest as compared to the last 4 days then that day is NR4 day. How is the range calculated?

The range is calculated as the difference between High and Low of the particular day. The day after NR7 or NR4 acts as the confirming day about further movement in price. If the breakout happens at the high of NR7 candle, it is a sign of bullishness and if the breakout happens at the low of NR4 candle it is a sign of bearishness. These are the basics you need to know to be able to interpret NR4 and NR7.