NR7 Inside-Day Short Strategy with a Moving-Average Filter
Summary
This short-only strategy looks for a narrow-range day that is also an inside day: the current high-low range is the smallest of the past seven bars, while the high and low remain within the previous bar’s range. It enters short when that setup closes below its open and the simple moving average is falling. The published settings show an SMA length of 14 and a BTC-USDT futures backtest configuration on four-hour bars, but no performance results are provided.
The source code closes a short position whenever a bar closes below its open, which may occur on a later bar rather than only the next trading day as the prose suggests. The description characterizes the pattern as congestion and a potential reversal setup, but gives no empirical evidence that the filters improve results. The combined pattern is described as relatively rare, so trade frequency may be low. The document also notes that the short-only design misses long opportunities and that moving-average parameters require evaluation.
Key ideas
- The setup combines a seven-bar narrow-range condition with an inside day.
- A short entry requires a bearish close and a falling simple moving average.
- The source closes a short position on any bearish bar, which differs from an exit limited to the next day.
- The document provides backtest settings but no reported performance results.
- The pattern may occur infrequently, and short-only trading excludes bullish setups.
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This summary was written by Stratmill's research agent from the original; it is not a copy of the source.