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Toby Crabel’s Day Trading Price patterns

NR

NR is Narrow Range
If a price bar's Range is less than the previous bar's range it is said to
have an NR. The opposite of NR is WS. NR is technically NR2 when
compared to NR4, NR5, and NR7

NR4

NR4 is Narrow Range 4


If a price bar's Range is less than the previous 3 bars' ranges
(measured independently) it is said to have the narrowest range in 4
days or NR4. The opposite of NR4 is WS4. NR, NR5, and NR7 are also
closely watched price patterns.

NR5

NR5 is Narrow Range 5


If a price bar's Range is less than the previous 4 bars' ranges
(measured independently) it is said to have the narrowest range in 5
days or NR5. The opposite of NR5 is WS5. NR, NR4, and NR7 are also
closely watched price patterns.

NR7

NR7 is Narrow Range 7


If a price bar's Range is less than the previous 6 bars' ranges
(measured independently) it is said to have the narrowest range in 7
days or NR7. The opposite of NR7 is WS7. NR, NR4, and NR5 are also
closely watched price patterns.

WS

WS is Wide Spread
If a price bar's Range is wider than the previous bar's range it is said to
have a WS. The opposite of WS is NR. WS is technically WS2 when
compared to WS4, WS5, and WS7.
WS4

WS4 is Wide Spread 4


If a price bar's Range is wider than the previous 3 bars' ranges
(measured independently) it is said to have the widest range in 4 days
or WS4. The opposite of WS4 is NR4. WS, WS5, and WS7 are also
closely watched price patterns.

WS5

WS5 is Wide Spread 5


If a price bar's Range is wider than the previous 4 bars' ranges
(measured independently) it is said to have the widest range in 5 days
or WS5. The opposite of WS5 is NR5. WS, WS4, and WS7 are also
closely watched price patterns.

WS7

WS7 is Wide Spread 7


If a price bar's Range is wider than the previous 6 bars' ranges
(measured independently) it is said to have the widest range in 7 days
or WS7. The opposite of WS7 is NR7. WS, WS4, and WS5 are also
closely watched price patterns.

ID

ID is an Inside Day.
If the high of the current day is lower than the high of the previous day
AND the low of the current day is higher than the low of the previous
day then we have an ID or Inside Day.
Although we talk in terms of Days with ID you can just as easily use
this term and price pattern to refer to bars or candles from any time
frame chart.
The opposite to an ID is an OD.

OD

OD is an Outside Day.
If the high of the current day is higher than the high of the previous
day AND the low of the current day is lower than the low of the
previous day then we have an OD or Outside Day.
A Day can be viewed as any bar on a bar chart of candle chart.
The opposite to an OD is and ID.
IDnr4

IDnr4 is an Inside Day (ID) with an NR4.


An IDnr4 is a combination of an ID and an NR4. This happens when the
current day's high is lower than the previous day's high AND the
current day's low is higher than the previous day's low AND the range
is the narrowest when compared to the previous 3 trading days.

2BNR

2BNR is the 2 Bar Narrow Range


If the 2-day-range (the higher of the 2 highs less the lower of the 2
lows) is the narrowest 2-day-range in the last 20 trading sessions then
this is true.

3BNR

3BNR is the 3 Bar Narrow Range


If the 3-day-range (the higher of the 3 highs less the lower of the 3
lows) is the narrowest 3-day-range in the last 20 trading sessions then
this is true.

4BNR

4BNR is the 4 Bar Narrow Range


If the 4-day-range (the higher of the 4 highs less the lower of the 4
lows) is the narrowest 4-day-range in the last 30 trading sessions then
this is true.

8BNR

8BNR is the 8 Bar Narrow Range


If the 8-day-range (the higher of the 8 highs less the lower of the 8
lows) is the narrowest 8-day-range in the last 40 trading sessions then
this is true.

BearHook

A Bear Hook occurs when you have an NR with the Open less than the
previous bar's Low AND the Close greater than the previous bar's
Close.

BullHook
A Bull Hook occurs when you have an NR with the Open greater than
the previous bar's High AND the Close less than the previous bar's
Close.
This is a Toby Crabel price pattern.

Stretch

The Stretch is calculated by taking the 10 period SMA of the absolute


difference between the Open and either the High or Low, whichever
difference is smaller.
For example, if the Open is 1250, the High is 1258, and the Low is
1240, then we would take the value of 8 for that day because 1258-
1250 is 8 which is smaller than 1250-1240 which is 10. We then add
together all of these values for the last 10 trading days and divide this
by 10 to get the 10 day SMA. This value will then become the Stretch.
The Stretch is used in calculating where to enter the trade and where
to place a stop using the ORB and ORBP trading strategies.

ORB

ORB is an acronym for the Opening Range Breakout, a trading strategy


devised by Toby Crabel.
Using this strategy, the trader places a buy stop just above the Open
price plus the Stretch and a sell stop just below the Open price minus
the Stretch. The first stop triggered enters the trader into the trade and
the other stop becomes the protective stop.
Crabel's research shows that the earlier in the trading session the
entry stop is hit the more likely the trade will be profitable at the close.
A market movement that kicks off a trend quickly in the current trading
session could add significant profit to a trader's position by the close
and should be considered for a multi-day trade.
Extending Crabel's research results it is obvious that as time passes
and we are not filled early on then the risk increases and it becomes
prudent to reduce the size of the position during the day. Trades filled
towards the end of the day carry the most risk and the later in the day
the trade is filled the less likely the trader will want to carry that trade
overnight.

ORBP

ORBP is an acronym for the Opening Range Breakout Preference, a


trading strategy devised by Toby Crabel.
An ORBP trade is a one sided ORB trade. If other technical indicators
show a strong trend in one direction then the trader will exercise a
"Preference" for the direction in which to trade the ORB trade. A stop to
open a position would be placed on the side of the trend only and if
filled a protective stop would then be placed.
The calculation of where to place the "stop to open" would be the same
as that for the ORB trade: For longs, the Open price plus the Stretch
and for shorts the Open price minus the Stretch.
The ORBP trade is a specialized form of the ORB trade.