Narrow range patterns come from Tony Crabbel’s book, ” Day Trading with Short Term Price Patterns & Opening Range Breakout“. The NR4 (Narrow Range 4) and NR7 (Narrow Range 7) patterns are quite popular with short-term traders. An NR4 pattern would be the narrowest range in four days, while an NR7 would be the narrowest range in seven days.
Bull Setup:
- Identify NR4 or NR7 day.
- Buy on move above high of narrow range day high.
Bear Setup:
- Identify NR4 or NR7 day.
- Sell on move below low of narrow range day low.
Studies and Statistics from Bulkowski:
