Today, you’ll learn how to find NR7 stocks easily.
I was looking for a strategy when I stumbled upon an NR7 Strategy in stocks. Well, I heard the strategy is profitable in trading.
Find out NR7 stocks with this AFL using Amibroker. This guide will get you started in trading this strategy. The AFL I wrote has been created as easy as possible.
What is NR7 narrow range?
An NR7 stock is an Open Range Breakout by Toby Crabel, published in the 1990s. The book, “Day trading using with short term price patterns and opening range breakout,” costs around $600 because it is hard to get.
NR7 narrow range is the shortest range within seven days of trading to find stocks for opening range breakouts.
In Toby Crabel’s opening range breakout strategy, I will show you how he trades the NR7 stocks to profit in intraday trading.
In the NR7 trading strategy, the trader has to scan for the narrowest candle in the last seven days to find break out opportunities.
The signal is in the 7th candle and when it is shorter than the previous six candles range.
At the 8th candle, you buy when the price breaks the previous day’s high. Also, you set the stop loss below the previous day’s low.
You should backtest when to sell because this strategy needs babysitting if you want to trade NR7.
This strategy is capitalizing the narrow range of price action. You understand that when the stock doesn’t move for days, the price may explode in one direction.
The 7th candle is the signal in this case.
In the NR7 breakout, the price can move upward or downward fast because of multiple narrow ranges.
Well, you know this will happen in stock trading when candlesticks are small to take the trade.
Here’s How to Code it?
NR7 stocks for tomorrow are stocks in which the latest day candle(today) is the smallest candle and must be inside the last six days’ candles. Today’s candle is the 7th day, and to find these stocks, an Amibroker can scan the stock market. Here is the list of codes:
Please include “AND R1<R7” in the code because I made a mistake in the video.
R1=H-L; R2=Ref(H-L,-1); R3=Ref(H-L,-2); R4=Ref(H-L,-3); R5=Ref(H-L,-4); R6=Ref(H-L,-5); R7=Ref(H-L,-6); ma200=MA(C,200); //added MA200 filter(Uptrend stocks) filter=R1<R2 and R1<R3 and R1<R4 and and R1<R5 and R1<R6 and R1<R7;
In this NR7 stock screener, you can get the 7th signal to trade the eighth days if the price broke the previous day high or low.
How reliable is the NR7 strategy?
In this opening range breakout backtest, the annual return percentage is only 2.77% because he used several filters. (source)
I use this system every day to find profitable trades. However, I use the long-only strategy in my trading because my backtesting revealed that shorting the NR7 is not beneficial to do.
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