The NR7 strategy is built on one of the oldest ideas in short-term trading: quiet days are followed by bigger days, so a narrow-range day is a signal to get ready for a breakout. We tested it, and its cousin the inside day, as a filter for a 30-minute opening range breakout on 16 years of Nasdaq-100 futures. The honest result: the filter did not improve the strategy overall.
NR7 stands for narrow range 7: a day whose high-to-low range is the smallest of the last seven days. The pattern is commonly credited to Toby Crabel, whose 1990 book Day Trading With Short Term Price Patterns and Opening Range Breakout devotes a section to patterns of expansion and contraction — the idea that volatility contraction tends to be followed by expansion. An inside day (a day whose high and low both sit inside the previous day's range) is another classic contraction pattern.
NR7 strategy rules we tested
- Market: NQ continuous front-month futures, June 7, 2010 to April 16, 2026. Setups use daily bars; trades use 15-minute regular-session bars (09:30–16:00 ET).
- NR7 setup: the daily range (high minus low) is the smallest of the last 7 daily ranges, including that day.
- Inside day setup: the daily high is below the prior day's high and the daily low is above the prior day's low.
- Trade day: the next session after the setup.
- Entry: 30-minute opening range breakout — stop order at the high or low of the first two 15-minute bars. First side broken wins; one trade per day; no entries after the 15:00 bar.
- Stop: the opposite side of the 30-minute range. Exit: the session close.
- Assumptions: exact fills at the levels; bars that break both sides are skipped.
- Costs: 1.0 NQ point per round trip.
All results are in NQ index points for one contract. MNQ is $2 per point and NQ is $20 per point, so MNQ dollars below are simply points × 2. Every trade has 1.0 point deducted for costs (slippage plus commission). The “all days” row is the same 30-minute ORB with no filter.
NR7 and inside day results vs trading every day
| 30-min ORB on… | Sessions | Trades | Win rate | Avg pts | Total pts | Profit factor | Closed-trade DD (pts) | 2010–2019 | 2020–2026 | PF 2020–2026 | Median range (pts) |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Day after an NR7 | 403 | 399 | 40.4% | +0.55 | +218 | 1.02 | 1,551.2 | -877.5 | +1,095.5 | 1.18 | 29.25 |
| Day after an inside day | 666 | 658 | 41.2% | +2.25 | +1,480.5 | 1.09 | 1,881 | -1,036.8 | +2,517.2 | 1.22 | 30.88 |
| All days (no filter) | 3,884 | 3,857 | 43.7% | +2.85 | +11,010.8 | 1.12 | 5,237 | -2,252.8 | +13,263.5 | 1.19 | 33.25 |
If volatility contraction really set up better breakouts, the filtered rows should show a higher average trade and profit factor than the unfiltered one. They do not:
- After an NR7: 399 trades, 218 points, an average of just 0.55 points per trade and a profit factor of 1.02 — essentially break-even after costs.
- After an inside day: 658 trades, 1,480.5 points, 2.25 points per trade, profit factor 1.09.
- Every day: 3,857 trades, 11,010.8 points, 2.85 points per trade, profit factor 1.12.
The unfiltered breakout had the best average trade. Filtering threw away most trading days (roughly 83% for the inside-day filter and 90% for NR7), and the days it kept were not better on average.
One thing the theory does get right: the opening range itself was smaller after contraction days. The median 30-minute range was 29.25 points after an NR7 and 30.88 after an inside day, against 33.25 on all days. Quiet tends to follow quiet at the open — but in this test that did not turn into better breakouts by the close.
The 2010s vs 2020s check
NQ rose from roughly 1,800 to roughly 26,000 over the test, so we split the sample. In 2010–2019, all three versions lost money: -877.5 points after NR7 days, -1,036.8 after inside days, -2,252.8 on all days. In 2020–2026 all three were profitable, with profit factors of 1.18, 1.22 and 1.19. The inside-day filter edged ahead in the 2020s, but look at where the profit came from:
| Year | After NR7 | After inside day | All days |
|---|---|---|---|
| 2020 | +206 | -480 | -2,649.8 |
| 2021 | +712.2 | +110.2 | +1,664.8 |
| 2022 | +826.8 | +509.5 | +4,014.5 |
| 2023 | -315.8 | -259.2 | +2,168.5 |
| 2024 | -887.2 | -147.2 | +3,839.8 |
| 2025 | +435.2 | +2,569 | +2,575.5 |
The inside-day version made 2,569 points in 2025 alone — more than its entire 16-year total. Without 2025 it would have lost 1,088.5 points. The NR7 version swung from +826.8 in 2022 to -887.2 in 2024. With only a few dozen trades a year, single years move these numbers a lot.
Our take: The narrow range 7 idea is elegant, and volatility contraction is real — the smaller opening ranges show that. But as a simple on/off filter for a 30-minute ORB on NQ futures, the NR7 did not add value in this test, and the inside-day filter's small advantage in the 2020s depends on one year. We are not saying Crabel was wrong: his work combined contraction patterns with other conditions and different entry methods, and markets have changed a lot since 1990. We are saying the popular, simplified “NR7 plus ORB” version did not beat just trading the breakout every day here. See also how stop placement affected the ORB.
What this test does not cover
- This is a backtest; past results do not guarantee future results.
- Daily bars come from a continuous contract, which has roll gaps; the NR7 and inside-day definitions use those bars as-is.
- Fills are assumed at exact levels on 15-minute bars; no overnight gap risk applies because trades close by 16:00 ET. No taxes.
- We did not test combined patterns (such as an NR7 that is also an inside day), NR4, or entries other than the 30-minute ORB.
Key takeaways
- 30-min ORB after an NR7: 399 trades, 218 pts, profit factor 1.02.
- After an inside day: 658 trades, 1,480.5 pts, profit factor 1.09 — with 2025 supplying more than all of it.
- No filter: 11,010.8 pts, profit factor 1.12, and the best average trade (2.85 pts).
- Contraction days did lead to smaller opening ranges, but not to better breakouts.
- 1.0 point per round trip deducted; MNQ = $2/pt, NQ = $20/pt.
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FAQ
What is an NR7 day?
An NR7 (narrow range 7) is a day whose high-to-low range is the smallest of the last seven days. It signals volatility contraction and is commonly credited to Toby Crabel.
Does the NR7 strategy work on Nasdaq futures?
Not as a simple filter in our test. A 30-minute ORB traded the day after an NR7 made 218 points on 399 trades (profit factor 1.02) from 2010 to 2026, versus 11,010.8 points (profit factor 1.12) trading every day, after 1 point of costs per trade.
Is an inside day a better filter than NR7?
Slightly, in our test: profit factor 1.09 vs 1.02. But the inside-day version made 2,569 points in 2025 alone, more than its whole-period total, so the edge depends on one year.
Loomi.Ai provides educational market research, not financial advice. Trading futures and options involves substantial risk of loss, and backtested results are historical and do not guarantee future returns.