Archive for Stocks & Futures Articles

NR7 Indicator, Breakout Setup

Dirk Vandycke mentions about NR7 Indicator and its use with Bollinger Bands and Keltner Channels in’s   February 2013 edition. He explains volality. I will check these indicators and setup when I get home. A few passages from the article:

“The metaphor the author likes to use here is that of a tsunami. Just before a tsunami hits a shore, the ocean seems to retract. Translated to volatility this means that after volatility shrinks, there’s a higher probability that it will start swinging off the charts. The longer volatility is (very) low, the wilder and longer the ensuing breakout might be. This does not, however, seem to hold true the other way around. Breakouts don’t necessarily have to be preceded by a volatility retraction.”