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Breakout
What does NR7 wait for before the breakout?
Narrow range 7 breakout
What it bets
After the bar's range shrinks to the narrowest of the recent bars, the next expansion is more likely to leave where price was.
How the rule is written
Crabel's narrow range: the high-to-low distance of the current bar is the smallest of the last 7 bars. The entry comes later, on a break of that narrow bar, or a break of its mother bar, in the direction of the break. The narrow range itself is not an entry.
When it fails
The narrowest bar can be followed by bars that stay narrow, or by a break that is taken back. When contractions stack, the first break is especially likely to be false.
Do not confuse it with
A Bollinger squeeze watches a standard-deviation channel get narrow. It is not one bar printing the narrowest range of 7. A volatility contraction pattern watches pullbacks get smaller, stretch by stretch, and it usually also wants a pivot.