AW10,
Good to see that our small discussion about NRs & IB has taken a form of a full-fledged thread.
I am trading NR4/7/IB concept in NF since a long time, but only for intraday basis. (may carry forward them for max 2-3 days).
Recently, I have noticed that NF has a tendency of giving a false breakout after range contraction.
I had incorporated this NR4/7/IB study in my mechanical pivot excel file in this thread Post #3
The resulting effect of such range contraction days can be easily since in this excel file which has Nifty Spot & Fut data from Jan 2008.
Usually, this range contraction happens ahead of an important news event, and most of the times, I have noticed that the breakout happens in form of a big gap open. Thus, not much "juice" is left on the following breakout day.
Hence, I usually buy Option Straddles or Strangles when such possibility of NR4-2 or NR7 comes up by 3:15pm.
By 3:30pm, I take suitable straddle/strangle position, and I am already in the trade on the following breakout day.
Good to see that our small discussion about NRs & IB has taken a form of a full-fledged thread.
I am trading NR4/7/IB concept in NF since a long time, but only for intraday basis. (may carry forward them for max 2-3 days).
Recently, I have noticed that NF has a tendency of giving a false breakout after range contraction.
I had incorporated this NR4/7/IB study in my mechanical pivot excel file in this thread Post #3
The resulting effect of such range contraction days can be easily since in this excel file which has Nifty Spot & Fut data from Jan 2008.
Usually, this range contraction happens ahead of an important news event, and most of the times, I have noticed that the breakout happens in form of a big gap open. Thus, not much "juice" is left on the following breakout day.
Hence, I usually buy Option Straddles or Strangles when such possibility of NR4-2 or NR7 comes up by 3:15pm.
By 3:30pm, I take suitable straddle/strangle position, and I am already in the trade on the following breakout day.
You made my weekend.
Thanks for enhancing your sheet to reflect this as well. Maybe TJ members will find that more useful.
Yes, I agree that NR7 breakout in last 3 /4 months have not been very successful since inter-day basis.. but the understanding of them gives good edge for intraday trading.
Generally the next 1 day or next 2 days see range expansion and hence intraday players can benefit from letting their profits run.
Beauty of this setup is that it gives the entry very close to the the logical stops that are at PH/PL which are very close to the entry level due to narrow bar.
Happy trading.