Trading NR7 setup

[SwamiNathan]

Hello Everybody,

I do not want to give ideas and make a disturbance. rohangawale has given the securities that have triggered and did not break out.

Instead of seeing for the present we can do a simulation for the past 5 years for a bucket of 100 securities. We can do Portfolio simulation(TRADESIM) or simple(in Metastock). If AW10 is ready give me the exact entry and exit criteria. I will do it and give it in this thread.

I have the data, and necessory softwares.

 

[AW10]

Thanks Swaminathan for your proposal.
Not sure if u have seen the post# 4 of this thread where I have given sample rules of developing a system on NR7 setup.

You can use them to backtest it. I am sure with tradesim type of software, it will be lot easier to validate the performance.

To start with, I will suggest to use NIFTY 50 stocks, or just pick up any top 10 or 20 stocks as backtest. If results are satisfactory then increasing the # of stocks or backtest period etc is kids job with software packages.

Plz post your queries/ doubts if you are confused anywhere.

Happy Trading.

 

[SwamiNathan]

Thanks AW10 for letting me to involve with your team

Entry and S/L Exits are Clear. The unclear thing is the Profit booking Exit. You have given a guidence of a trailing Exit. We will have a simple trailing exit of Moving average 5 day . If u have any other idea u tell me.

Entry: High > High of NR7 and High > MOV AVE of 5 days (Bcoz we are having a trailing S/l, there shud nt be contradctions)
ENTRY PRICE: High of NR7
ENTRY Type: S/L Buying

Exit: Low<Low of NR7 OR Low<MOV AVE of 5 days
Exit Price: S/l Selling at Moving Ave of 5 days or Low of NR7 which ever is lower.
Exit type : S/l Selling

Similarly for Short trades.

Am I right?

Pls give me any other ideas of Profit booking. I use a Volatilty Based Profit booking.

 

[asnavale]

SM Bhaijan,
Just a few observations
1) Haven't heard of term NR1.. the minimum is NR2 i.e. today's range minimum of last 2 days including today.. (I think thats what u are calling as NR1).

2) Inside day is certainly NR2 or greater.. But you can have NR2 (i.e. todays range smaller then yesterday's range) beyond yesterday's candle.. i.e. it will not be Inside day but still qualify for NR2.

3) Yes, it certainly makes sense to tap INSIDE days. Which is pretty simple to identify without any NR formula but just by chking for (High Today < High yesterday) + (Low today > low yesterday)

Happy Trading.

Hi Murtaza Bhai,

I too wanted the clarification regarding NR1. By the definition of NR7, we can see that NR7 is also NR4 and NR2(if you meant NR1 as actually NR2). As it is pointed out already, Every Inside Day bar is NR2 but vice versa is not true.

Two more points need clarification:

1) Do you want the AFL to show NR7, NR4, NR2 and Inside Bar on chart only or in exploration also?
2) If Exploration is also required, do you want all of these (NR7, NR4, NR2 and Inside Bar) to be shown in a single report or you want one report for each?

If you can clarify these points I will make the AFL and post it here.

Regards

-Anant

 

[VJAY]

Thanks anant,

am requested the afl here long back.But no one done that.You are the one who giving afl and helping to make afl to us.Awaiting your another afl for us...

 

[MurAtt]

Anant,

NR7 an NR4 are as you have understood.
NR1 (we are talking NR - that is why I termed it as NR1) bcoz it is the first day narrow range and inside the body of the last candle - which is actually Inside Day.
To be more particular, if we had the inside day tag on the real body of the candle rather than the shadow, it would be iciing on the cake (basically instead of HL, we would use Open and Close).

As regards the listing, we can have NR7, NR4 and Inside Day lists separately (but in a single report) or we can have the option of looking for only NR7 or only NR4 etc. whichever is easier (as AW10 has said earlier too and me also feeling the same that in this volatility NR4 is ok, NR7 is the main candle to look forward to).

Again some complications would arise as to if a NR7 can also still be an Inside Day, same with NR4. I feel these would be more powerful breakouts / breakdowns than the normal NR7/4 days.

Asking for too much

Thanks once again ...

Hi Murtaza Bhai,

I too wanted the clarification regarding NR1. By the definition of NR7, we can see that NR7 is also NR4 and NR2(if you meant NR1 as actually NR2). As it is pointed out already, Every Inside Day bar is NR2 but vice versa is not true.

Two more points need clarification:

1) Do you want the AFL to show NR7, NR4, NR2 and Inside Bar on chart only or in exploration also?
2) If Exploration is also required, do you want all of these (NR7, NR4, NR2 and Inside Bar) to be shown in a single report or you want one report for each?

If you can clarify these points I will make the AFL and post it here.

Regards

-Anant

 

[SwamiNathan]

SYSTEM TESTER - METASTOCK for NR7 is as follows

First create an indicator as below

NR7 {the name shud be only this}
RANGE:=H-L;
NR7:=If(RANGE<Ref(RANGE,-1) AND RANGE<Ref(RANGE,-2) AND RANGE<Ref(RANGE,-3) AND RANGE<Ref(RANGE,-4) AND RANGE<Ref(RANGE,-5) AND RANGE<Ref(RANGE,-6),1,0);
NR7

{Then create a metastock system tester - u can give ur own name}

Buy Order:
REF(Fml( "NR7"),-1) =1 and h>(0.05+ref(h,-1)) and REF(l,-1)> REF(Mov(c,5,s),-1)

{For profit stop we are using a trailing 5 period MA. Therfore We have included and REF(l,-1)> REF(Mov(c,5,s),-1) in order to avoid controvacies. i.e. we are not entering long is the low of the NR7 is lesser than 5 period MA. If anybody have better suggestion u can give}

Order type
STOP LIMIT

{We are doing all trades in stop loss basis only, If NR7 method gives a buy and yest high is 357.50, then we are giving a stop loss buying at 357.55, i.e. 0.05 paisa plus yest high}

Stop Price
0.05+REF(H,-1)

Expiration
Good gor Day
___________

Sell order
IF(REF( Fml( "NR7") ,-1)=1,l<(REF(L,-1)-0.05),l<REF(mov(c,5,s),-1))

{If yest is NR7 then we have bought today, our s/l is yest's low less 5 paise. In other cas, If we have entered yesterday or older then if the prices cuts 5 day MA(of yest) then we are closing by S/l. This will work as a trailing stop loss and also a profit stop. We will put stop loss in the mkt opening itself with trigger is yest's 5 day MA if we have entered yest or older. If we have entered today, i.e. if yest is NR7, We will put a stop loss at yest's low less 5 paisa.}

Order type Stop Limit

Stop Price: IF(REF( Fml( "NR7"),-1)=1,(REF(L,-1)-0.05) , REF(Mov(c ,5 ,s ),-1) )

Expiration
Good gor Day
__________________

Sell Short Order

REF(Fml( "NR7"),-1) =1 and L<(-0.05+ref(l,-1)) and REF(h,-1)< REF(Mov(c,5,s),-1)

Order type Stop Limit

Stop Price:
-0.05+REF(l,-1)

Expiration
Good gor Day

__________

Buy to Cover Order

IF(REF( Fml( "NR7") ,-1)=1,h>(REF(h,-1)+0.05),h>REF(mov(c,5,s),-1))

Order type: Stop Limit

Limt Price:
IF(REF( Fml( "NR7"),-1)=1,(REF(L,-1)-0.05) , REf(Mov(c ,5 ,s ),-1) )

Expiration

Good for Day

_____________________


All formulas are done in metastock 10.1 VErsion, but will work for older ver also. All codes are done with simplicity so that MEtastock 6.1 will even accept the codes. For ex, in NR7 indicator can be dome by LLV function. But it is not available in 6.1. You do all testing in your own metastock. All Price data are available freely. If u have any queries you are welcome.

All coding is based on post #4 of this thread with some modifications i discussed in my previous one or two of my posts in this thread.

 

[lazytrader]

If I am suggest a TrailSL strategy: there's something called Countback support.

Basically what you do is count the higher highs/lower lows or candles beginning from today. How to do it is take todays low (assuming long position) go back to find the lower low, this would be 1 (if there is a higher low ignore it), they look for a lower low than 1 that would be 2. this can be repeated but 2 seems to be a good level. Now each day the countback support is updated if it higher but not decreased.

Eg: Nifty, Date, o, h, l ,c
04-09-09 4608.70 4697.20 4580.35 4680.40
07-09-09 4682.40 4790.00 4679.30 4782.90
08-09-09 4782.85 4842.20 4782.65 4805.25
09-09-09 4804.90 4825.05 4783.50 4814.25
10-09-09 4814.35 4889.05 4807.90 4819.40
11-09-09 4819.40 4856.15 4791.55 4829.55
14-09-09 4830.35 4832.25 4786.25 4808.60

Yesterdays low 4786.25, lower low is on 9/9 at 4783.5 (ignore higher lows)
next lower low is 4782.65 8/9/09. If reqd a value of 5 can be subtraced to make SL 4777.65 (filter) to prevent stop flushing.

 

[ag_fx]

Profit Management:

one of the ways deployed is this: You open yous position with 2 lots. your SL is defined at the entry. You book 1 lot at the R:R of 1:1 and leaving the SL in its place. This would make the trade a free trade and then you can ride it to the next SR level/fibo level or any other level. IMHO, with a technique like NR7, you cant decide a mechanical exit and you have to keep a look at the PA to decide what to do.

 

[AW10]

Anant,

-------------

Again some complications would arise as to if a NR7 can also still be an Inside Day, same with NR4. I feel these would be more powerful breakouts / breakdowns than the normal NR7/4 days.

Maybe, you can tag NR7 / NR4 with Inside day as IDNR7 / IDNR4 candle, else they get tagged as NR7/NR4.

by the way, IDNR is the name also used by Toby Crable.

Happy Trading