NR7/NR4 trading strategy means when the narrowest range (shortest candle) occurs, it is a sign that volatility has contracted and the stock is now ready for a break out on either side (up or down). Range means difference between days high and days high. I simple words, if todays high- todays low is smallest of last 6 days high-low (range) today is NR& day. If we take this for 4 days , its NR4 day when todays range is smallest in last 4 days(inclusing today)
Usually NR7 stocks are good to trade if they break out of that narrow range.This can be used primarily in short term trading as this NR7 signal is valid for next 5-6 days
To trade NR7 stocks, Mark high and low of NR7 day as resistance and support. If stock breaks up or down the high or low of NR7 candle, Buy or sell accordingly.Stop loss is Low of NR7 candle when you buy and high of NR7 candle when you sell.