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NR7 Volatility Contraction BreakoutCrabel's narrowest range of seven

Evidence: ModerateIntermediateVolatility · Breakout

NR7 means today's daily range is smaller than every one of the previous six. An objective, binary marker of maximum compression.

Entry the next day on the break of that compressed bar's high or low. The stop is only as wide as one narrow bar — which is the whole attraction of the pattern.

This is the non-parametric version of the same phenomenon as the Bollinger Squeeze: no standard-deviation assumption, just a ranking.

Category
Volatility · Breakout
Timeframe
D1 signal · M15/M30 execution
Suitable pairs
EURUSD · GBPUSD · USDJPY · AUDUSD · USDCAD · XAUUSD
Session
The breakout usually triggers at the London or New York open
Indicators / tools
Daily high−low range · seven-bar range comparison · ATR(14). No indicators — pure price.

Valid setup

S07 · NR7 VOLATILITY CONTRACTION BREAKOUT — VALID SETUP GBPUSD · D1 · Crabel's narrowest-range-of-seven, then the opening-range break LONG 1.2517 1.2563 1.2610 1.2656 1.2703 1.2749 1.2796 NR7 ENTRY = buy stop above the NR7 high SL = NR7 low — setup invalid below it TP = 2 × NR7 range 1R +2R 1 2 3 4 5 ① Six normal-range days — the comparison set ② NR7: today's high-low is smaller than EACH of the previous six. Note how small the stop is — that is the whole attraction of the pattern. ③ Expansion candle closes well beyond the NR7 high ④ Entry fills on the break; risk is one narrow bar ⑤ Crabel's classic exit is the same day's close. Test day-close vs next-day-close as two separate variants — never blend them. 1.2619 1.2600 1.2591 NR7 day Daily true range — the marked bar is narrower than each of the six before it

Exact rules

Entry

  • NR7 condition: range[0] < min(range[1..6]), where range = high − low.
  • The next day: BUY stop = NR7 high + spread. SELL stop = NR7 low − spread. OCO.
  • Entry window: eight hours from the day open. Cancel the orders after that.
  • Purist Crabel variant: use the next day's opening range (the first 30–60 minutes) instead of the NR7 high and low. That is a different variant — log it separately.
  • Optional directional gate: trade only in the direction of the D1 50-EMA. Test it with and without.

Stop loss

  • At the opposite extreme of the NR7 bar — below the NR7 low for a long.
  • Or 1 × NR7 range, whichever is tighter.
  • This stop is naturally small, so the position size comes out larger than usual, and so does the absolute cost of slippage. A demo test tells you more here than a backtest will.

Take profit / exit

  • TP = 2 × NR7 range.
  • Or Crabel's classic exit: the close of the same day.
  • The NR7 range is small, so the R-multiples look good — but only when the expansion actually arrives. When it does not, you take a run of small losses.

Build NR7 Volatility Contraction Breakout

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More from Breakout

Opening Range Breakoutthe first thirty minutes set the dayATR Channel Breakouta level that moves with volatilityTrendline Breakoutthe level you drew yourself

Trading carries risk and most retail accounts lose money. Nothing on this page is financial advice or a recommendation to trade. The chart is an illustration of the rules on constructed candles — it is not a record of a trade and not a backtest.