NarrowAI Theory

Introduction

The Narrow Range Bar Trading System focuses on identifying periods of reduced volatility to predict potential price breakouts. This system is effective on daily and weekly charts, providing traders with precise entry and exit points.

How It Works

Setup

A Narrow Range Bar (NRB) is defined as a bar that has a smaller range between high and low than the previous bar. An NRB indicates a dramatic decrease in volatility. For example, if XYZ has a high of 22 and a low of 20 on Monday, the range is 2 (22 - 20 = 2). If the next day trades between 21.50 and 21 (0.50), it is an NRB.

Entry

Buy at the day's high (LONG) / Sell at the day's low (SHORT)

Permanent Filters

• 50 % + X must tend in one direction
• Intermarket spread DJIA: Weekly basis
• 20-day average weekly basis
• Triple bar trend-following filter weekly basis

Volatility Filter

0.5 % - 2.5 % daily basis

Stops

• Initial stop for LONG position is the current candle's low.
• Initial stop for SHORT position is the current candle's high.
• Trailing stop: After each day’s candle, the stop is moved by the amount of the book profit.
• Time stop: 5 candles if no stop is reached.

Profit Target

For half of the position, set a profit target of 2R in relation to the initial stop.

Position Size

1 % of the account volume: Point distance of the initial stop = number of shares

Loss Brake

After 2 consecutive losses, the system is blocked for the applied timeframe. The same block applies to the traded base value.

System Highlights

• Advanced AI algorithms designed to spot market trends.
• Real-time analysis to make quick and informed decisions.
• Customizable options for individual trading preferences.

Optimizing Your Strategies

Discover techniques to maximize your trading success with our detailed guide on using the Narrow Range Bar System effectively.

Download Full Guide

Join Our Community

Engage with other traders and share insights on our dedicated online platform.

Visit Community

Conclusion

The Narrow Range Bar Trading System is more than a set of rules; it is a comprehensive trading framework that integrates technical analysis, psychology, and rigorous risk management. It equips traders with the knowledge and tools necessary to navigate the complexities of the market, maximizing opportunities while controlling risk. By applying this system, traders of all experience levels can enhance their market presence, making informed and profitable trading decisions.