NR7 inside day breakout
NR7 stands for narrow range 7: a session whose high-to-low range is the smallest of the last seven. When that session is also an inside day, sitting entirely within the previous day's range, the market has gone unusually quiet. This strategy trades the next session's break out of that tight range in NIFTY futures, on the idea that a volatility squeeze tends to be followed by a larger move.How it trades
Results
PRE-BUILT · DEFAULTSWhere it made and lost money
Five trades are far too few to judge any market condition. The two trades taken after a normal VIX reading lost ₹24,512 and the two after a nervous reading (above 14.5) lost ₹19,168; the only winner, ₹3,088, came after a calm VIX evening. Two choppy days lost ₹19,168 between them. What the trades share is the mechanism in the code: the stop is the far side of the setup day's range, so when a breakout fails and price crosses back through the whole range, each loss is a full day's range on a futures lot.
About this strategy
- After each session, check the near-month NIFTY future's daily bar: is its range the narrowest of the last seven, and is its high below and low above the previous session's?
- Skip setups on or just after a futures expiry day, where the daily bars compare two different contracts.
- Next session, buy one lot on the first tick above the setup high, or sell one lot on the first tick below the setup low, whichever comes first, up to 15:00.
- If the session opens already beyond one side, that side is not traded.
- Place the stop at the opposite end of the setup range: the setup low for a long, the setup high for a short.
- By default, square off at 15:15 the same day; one trade per setup.
Why traders use it
Markets alternate between quiet and active phases, and a narrow-range inside day is one of the clearest signs of a quiet one. Traders expect the coiled range to release, and the setup gives a precise trigger on both sides and a stop that is already defined by the setup itself. Because the range is narrow, the stop is close, which makes the risk per trade look small. The pattern is decades old and is a staple in pattern-based trading books.
The year in plain words
The NR7 inside-day setup is rare. On NIFTY from 1 Oct 2025 to 30 Sep 2026 it produced only 5 trades, and 4 of them lost. Three were stopped at the setup low after a long breakout failed, and two were squared off at 15:15; the only winner, in August, made ₹3,088. Net P&L was a ₹40,593 loss before costs and ₹42,542 after ₹20 per order and slippage. Each stopped trade lost around ₹11,000 to ₹13,600, as a full day's range is a wide stop for a futures lot.
What the settings do
Risks
- The setup appears only a few times a year, so results rest on very few trades.
- The stop sits a full setup-day range away, which for a NIFTY futures lot can mean a five-figure loss on one trade.
- False breaks are common, and both sides of the range can be tested in the same session.
- With the multi-day hold options, the position is exposed to overnight gaps.
Who it suits
Traders who like pattern-based breakout trades with a defined stop and can accept long gaps between signals. A NIFTY futures lot needs full intraday margin and tolerance for large single-trade losses.
Questions traders ask
What is an NR7 day?
It is a session whose range, high minus low, is the smallest of the last seven sessions including itself. It marks a contraction in volatility. NR4 is the same idea over four sessions.
What is an NR7 inside bar?
It is an NR7 day that is also an inside day: its high is below the previous session's high and its low is above the previous session's low. The combination points to an especially tight range, which breakout traders watch for a move in either direction.
Is the NR7 inside bar breakout profitable on NIFTY?
In this backtest from 1 Oct 2025 to 30 Sep 2026 it traded 5 times and lost ₹40,593 before costs and ₹42,542 after ₹20 per order and bid-ask slippage. Five trades are too few to judge the setup, and past results do not guarantee future ones.
Where is the stop loss placed in the NR7 strategy?
At the other side of the setup day's range: below the setup low for a long, above the setup high for a short. If the breakout fails and price crosses the whole range, the trade is closed.