Shorting Bearish NR7 Inside Days with a Falling SMA
Summary
This daily, short-only strategy looks for a narrow-range seven day that is also an inside day. The signal bar must have a lower high and higher low than the prior bar, while its high-low range is narrower than each of the preceding six ranges. A short entry additionally requires a bearish close and a declining simple moving average, whose period can be adjusted. The script marks the patterns and can color qualifying bars and the moving average by direction.
The stated exit condition closes the short when a later bar also closes below its open. The author recommends adjusting the moving-average period, but the document gives no backtest results or evidence that the combined pattern is profitable. It describes the setup and visualization rather than offering risk controls such as a stop or a position-sizing method. The long-side logic is shown only as commented-out code and is not active in this version.
Key ideas
- An NR7 bar has a range smaller than the ranges of the previous six bars.
- An inside day has a lower high and a higher low than the preceding bar.
- The short entry combines both patterns with a bearish close and a falling simple moving average.
- The moving-average period is adjustable and determines the direction filter.
- The documented exit closes a short when a subsequent bar closes below its open, without specifying a protective stop.
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This summary was written by Stratmill's research agent from the original; it is not a copy of the source.