Monthly Archives: November 2010

The ID-NR4 Setup

ID-NR4 is a market structure feature that I don’t purposely look for – my strategy should pick up these setups just due to the presence of S/R. However it may be a concept that appeals to you. If that’s so, it’ll make an easy addition to your analysis routine, taking about one second to determine whether it’s potentially in play or not.

Let’s look at the ID-NR4.

I’m not sure of the originator of this concept. I believe I first heard of it in Linda Raschke and Larry Connors excellent book, Street Smarts. I believe they got it from Tony Crabel. I’ve seen it in several other sources as well.

In any case, it’s very simple.

ID stands for Inside Day. That is a daily candle which has a high below the previous day’s high and a low above the previous day’s low. So the whole range fits within (inside) the range of the previous day.

NR4 stands for narrowest range of the last 4 days.

An ID-NR4 candle meets both the ID and NR4 requirements.

Let’s look at a recent example. The daily chart below identifies an ID-NR4 candle on Nov 17th. You can visually see that the range of this candle exists inside the range of the previous candle; plus the range is the smallest of the last four days.

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Linking your Trading Journal to your Charts

My current business practice is for the use of an electronic trading journal spreadsheet, plus hardcopy printouts of charts. For those though who prefer to operate all electronic, saving on folder after folder of hardcopy printouts cluttering your trading office, the following is a simple Excel trick to allow you to easily find the chart image associated with each trade (within seconds), allowing for easier review at a later date & time.

It involves creating a hyperlink within your journal spreadsheet which links to your saved chart image. Most people associate hyperlinks with a link to a webpage. They can also link to files on your hard-drive, as we’ll see in this case.

Following the trade, save an image of your chart to your charts folder on your hard-drive.

Later, when time allows, annotate notes on the chart. Your charting platform may allow easy addition of notes. If not, there are many image editors available on the market.

For example:

Enter the trade details into your trading journal spreadsheet, then click on the cell which you wish to make into a hyperlink:

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