NR7IB Indicator – A Powerful Tool for Identifying Breakouts

The NR7IB indicator available on the mql5.com marketplace has become a popular tool among technical traders for identifying potential breakout opportunities. This review will provide an in-depth analysis of how the indicator works, its key features, pros and cons, and various trading strategies that can be used with it.

NR7IB Indicator

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Overview of the NR7IB Indicator

The NR7IB indicator shows the narrowest range bar within the past seven bars, known as the NR7, as well as highlighting any NR7 bars that are also inside bars (NR7IB). The default settings show the NR7 and NR4 ranges.

An NR7 bar indicates a period of contracted volatility and reduced trading range, which often precedes a breakout as volatility expands again. An inside bar further strengthens the potential for a breakout. The indicator marks NR7IB bars in a separate color for easy identification.

Some key features of the NR7IB indicator include:

  • Flexibility to specify any two range lookbacks (e.g. NR7/NR4, NR11/NR6)
  • Ability to show highest (HI7), lowest (LO7), and widest (WI7) bars in specified range
  • Applicable to charts of any timeframe or symbol
  • Customizable colors and style for NR7 and NR7IB bars

Table 1: Key Features of the NR7IB Indicator

Feature Description
NR7 Range Shows narrowest range bar in past 7 bars
NR4 Range Shows narrowest range bar in past 4 bars (default)
Inside Bar Detection Highlights NR7 bars that are also inside bars
Flexible Range Selection Allows selection of any NR range combination
Additional Range Extremes Can show highest, lowest, widest bars in range
Timeframe Agnostic Works on any symbol and timeframe
Customizable Styling Colors and style for NR7 and NR7IB bars can be changed

The indicator is easy to set up and use out of the box, while also providing extensive customization options for power users.

Trading Strategies Using the NR7IB Indicator

The NR7IB indicator can be incorporated into a variety of short-term trading strategies across any market or timeframe. Here are some examples:

Breakout Strategies

One of the most common uses of the NR7IB indicator is identifying potential breakout trades. Some approaches include:

  • Buy stop/sell stop orders – Place pending orders just above the NR7/NR7IB high or just below the NR7/NR7IB low to enter on a breakout
  • Bracket orders – Place a buy stop and sell stop bracketing the NR7/NR7IB range to enter on a breakout in either direction
  • Confirmation filters – Require additional confirmation from another indicator (e.g. volume spike) before entering on an NR7/NR7IB breakout

Reversal Strategies

In some cases, an NR7IB can mark market turning points and reversals:

  • Fade the breakout – Enter short if the price breaks below the NR7IB low or long if the price breaks back below the NR7IB high
  • Combination reversals – Combine with reversal patterns or indicators to identify high probability reversal setups

Range Trading Strategies

NR7IB bars can also be used to define potential trading ranges. Some approaches include:

  • Fade range extremes – Enter long near NR7IB low and exit/reverse near high (or vice versa)
  • Write iron condors – Use NR7IB high/low to set wings of short iron condor options trades

The indicator can be combined with other analysis methods and customized significantly, making it extremely versatile. It works especially well for short-term traders across stocks, forex, and futures.

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Pros and Cons of Using the NR7IB Indicator

Some of the notable pros of using the NR7IB indicator for MT4 are:

Pros:

  • Rapidly identifies low volatility contraction patterns
  • Marks high probability breakout and reversal setups
  • Extremely flexible and customizable to suit any trading style
  • Simple and intuitive trading signals
  • Works in any market and timeframe

And some potential cons to keep in mind:

Cons:

  • Can generate false signals and whipsaws
  • Requires additional filters or confirmation for best performance
  • Does not indicate price direction or momentum
  • Works best for short-term trading strategies

While false signals can occur, the NR7IB indicator still provides a probabilistic edge, especially when used selectively and in combination with other analysis techniques.

Conclusion

The NR7IB indicator available on mql5.com provides technically sound analysis of volatility contraction patterns and consolidations. It excels at rapidly identifying potential breakout and reversal trade setups across any symbol or timeframe.

While simple to use out of the box, more advanced traders can extensively customize the indicator’s settings and combine it with other analysis tools. When incorporated into a robust trading plan, the NR7IB indicator can provide a high probability edge.

Overall, at the reasonable price point offered on the mql5.com marketplace, the NR7IB indicator is a worthwhile addition for most short-term active traders.

Author: Dominic Walsh
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I am a highly regarded trader, author & coach with over 16 years of experience trading financial markets. Today I am recognized by many as a forex strategy developer. After starting blogging in 2014, I became one of the world's most widely followed forex trading coaches, with a monthly readership of more than 40,000 traders! Make sure to follow me on social media: Instagram | Facebook | Linkedin | Youtube| Twitter | Pinterest | Medium | Quora | Reddit | Telegram Channel

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