Thread by @chartians

95% of the traders lose money in the stock market because they don't have a proper trading setup.

Here is a simple cash trading strategy based on NR4/NR7 candles (that can be automated) that can help you catch Mega Breakouts in the Market

Surprise at the end!

A Thread🧵:

We will split this thread into five parts:

• What is NR4 and NR7
• How to use NR4 and NR7 in your Trading (Daily/Weekly Time Frame)
• Free Tradingview Indicator
• Free NR4 and NR7 Screener Link to simplify your analysis

1/ What are NR4 and NR7:

NR4 (Narrow Range) and NR7 mean when a stock price has made the smallest range (High-Low) in the last 4 and 7 days respectively.

These candles indicate compression in the price and it is expected to give a massive one-sided move in either direction.

2/ How to Trade NR4 Candle?

⚡️ Identify NR4 Candle
⚡️ Mark the High of that Candle
⚡️ Place a buy limit or GTT Order if the next few candles go above the High of the NR4 candle

⚡️ Keep Stoploss as the low of the NR4 Candle

⚡️ Keep a Target of at least 1:2 or 1:3 Risk:Reward. If the Risk at Stoploss is 2% then keep the target of at leas 4-6%. Anything above this is good or can trail Stoploss also whichever is appropriate
⚡️ Exit if Stoploss/Trailing Stoploss/Target is hit

Let's see some NR4 examples:

#CERA formed a NR4 Setup on 4th May 2023.
The next candle crossed NR4 Candle High and buying was triggered.

Buying Price: 6470
SL: 6370
Target: 6670/6870 which got hit.

If TSL was used then for 100 points risk, the profit is 700 points.

3/ How to Trade NR7 Candle?

⚡️ Identify NR7 Candle
⚡️ Mark the High of that Candle
⚡️ Place a buy limit or GTT Order if the next few candles go above the High of the NR7 candle

⚡️ Keep Stoploss as the low of the NR7 Candle

⚡️ Keep a Target of at least 1:2 or 1:3 Risk:Reward. If the Risk at Stoploss is 2% then keep the target of at least 4-6%. Anything above this is good or can trail Stoploss also whichever is appropriate
⚡️ Exit if Stoploss or Trailing Stoploss or Target is hit

Let's see some NR7 examples on weekly tf:

#LIKHITHA formed a NR7 Setup on 27th March 2023.
The next candle crossed NR7 Candle High and buying was triggered.

Buying Price: 239
SL: 227
Target: 263/275 which got hit.

If TSL was used then for 12 pts risk, profit is 60 pts.

These are some examples where NR4 and NR7 worked beautifully.

There are cases where SL will hit and as a robot, you have to exit the trade immediately.

That's why we suggest keeping Risk:Reward of at least 1:2 and even with 50% accuracy you will be profitable.

Guidelines for to use NR4 and NR7 Strategy:

⚡️ Use Divergence on the minimum time frame of Daily and Weekly.
⚡️ Holding period might be small depending on risk and target.
⚡️ Part Time Traders can put GTT Orders for Buying, SL, and Target.

⚡️ Follow Stoploss and Target always.
⚡️ A NR4 and NR7 candle will become invalid if the subsequent candles cross below the low of NR4 and NR7 candles. Such stocks can be removed from the watchlist.

Isn't this setup relatively easy to practice and follow?

Let's simplify it with FREE Tradingview Indicator to identify NR4 and NR7 candles on your charts.

Indicator Link: in.tradingview.com/script/Rs9SeFQ…

The following Setting needs to be done after adding the indicator on Tradingview. Refer to the first image.

Your Indicator part in the Chart will look like the second image.
The "diamond" indicates NR7 and the "plus" indicates NR4 Candles.

Below are the screener links for both.

NR4 : chartink.com/screener/nr4-d…

NR7: chartink.com/screener/nr7-c…

Note: Above screeners will just help in getting the name of the stocks from the list of the universe.

It's your responsibility to take confirmation from the chart once and plan your entry, stoploss, and target in the stock trades that you are taking.

This is all about the NR4 and NR7 Trading Strategies and How to Trade based on them.

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