NR4 & NR7 with Breakouts

NR4 & NR7 with Breakouts is a simple indicator that utilizes the NR4 and NR7 candle patterns to display candle ranges and signals from range breakouts.

USAGE

The Narrow Range Patterns are candle formations determined by the last candle having a narrower (high-low) range than the previous number. This indicator showcases the 2 most recognized Narrow Range Patterns, which are the 4 and 7 bar variants (NR4 and NR7).

These patterns, introduced by Toby Crabel, are thought to provide insight for potential market breakouts by identifying periods of low volatility indicated by a candle with a small range. This is due to the idea that markets often move from periods of low volatility (contraction) to high volatility (expansion), and the NR4 and NR7 patterns help spot these transitions.

By utilizing these patterns, traders are better able to anticipate and respond to market shifts for better decision-making and risk management.

NOTE: These patterns have traditionally been studied on the Daily Timeframe Chart. This indicator allows the user to select a timeframe to generate these patterns from. It is suggested to be mindful of this when considering these patterns.

In this indicator, on the bar after the pattern is detected, the Narrow Range Bar will be highlighted with a zone, and lines displaying the range will extend from it. These ranges are helpful for providing levels to set limit orders and for managing risk.

Users are able to adjust which pattern they want visualized on their chart, please note;

All NR7s are NR4s but not all NR4s are NR7s.

Because of this, you will notice that when selecting "NR4" to display, the colors will change, but the detected ranges will not change.

Signals

When a Narrow Range Bar is detected, the script will wait for the price to close outside of the Range, then a signal will fire indicating the direction of exit. The signals are produced from the last NR4 or NR7 and will have the potential to fire from that range until a new NR4 or NR7 is detected.

After a signal fires, the logic goes into a "reset" period where it will wait for the price to reach the Range Mean before firing another signal.

These signals can be anticipated by considering the underlying logic and watching price approach the range extremities, and can be improved by utilizing other market information for confluence.

SETTINGS

• Timeframe: Choose which timeframe to identify the NR4 and NR7 Pattern on. This must be Higher than the chart timeframe.
• Pattern Type: Choose which (or all) patterns to display.