NR4/NR7 Narrow-range Bars

What are NR4/NR7 Narrow-range Bars?

An NR4 bar is a bar whose high-to-low range is the narrowest of the most recent four bars; an NR7 is the narrowest of the most recent seven. The definitions come from Toby Crabel's short-term futures research and are deliberately mechanical: no pattern judgment, just a range comparison, which makes them easy to scan for and to test. The ID/NR4 variant adds the requirement that the bar also be an inside bar, compressing both its range and its position within the prior bar.

The premise is that markets alternate between contraction and range expansion: an unusually narrow bar marks a coiled session that frequently precedes a larger directional bar, so the classic treatment brackets it with entry stops on both sides. Frequently is not always; narrow bars also cluster in dead, choppy tape and ahead of holidays.

How to identify NR4 and NR7 bars

The check is mechanical and works on any timeframe, though the pattern was developed on daily bars.

1. 1Measure each bar's full range, high minus low. Wicks count; this is not a body comparison.
2. 2Compare the current bar's range with the prior three bars for NR4, or the prior six for NR7. If it is the narrowest of the set, the flag fires.
3. 3For ID/NR4, also require an inside bar: the high below the prior bar's high and the low above the prior bar's low.
4. 4Mark the narrow bar's high and low. The classic play places entry stops just beyond both sides and exits or reverses at the opposite extreme.

How traders use it

• As a breakout trigger: entry stops beyond the narrow bar's high and low, taking whichever side fires first, with the opposite side as the stop or a stop-and-reverse point.
• As a compression gauge: clusters of NR7 flags inside a base signal the tightening that setups like the volatility contraction pattern formalize over longer horizons.
• As session context: day traders often treat an NR7 daily bar as a reason to expect a livelier next session and lean on opening-range logic to trade it.