Narrow Range 4 (NR4) Pattern

Daily S&P 500 setup: narrowest range in 4 bars, then trade the break of the NR4 bar high/low with an ATR(20) buffer, filtered by the SMA 200 trend.

Published · Updated · Methodology: Technical Indicators

Part of: Moving Average Strategies

  • Methodology: Technical Indicators
  • Content type: strategy
  • Timeframes: Daily
  • Markets: S&P 500, US Indexes

Indicators used

  • Narrow Range 4 (NR4)
  • ATR
  • SMA

Source video

Decoded from: Narrow Range | Toby Crabel NR4 Pattern! by Ali Casey | StatOasis — watch the original

Key timestamps:

  • 0:30 - Introduction to NR4 pattern
  • 1:15 - NR4 pattern definition (smallest range in 4 bars)
  • 1:30 - Toby Crabel's original NR4 vs. presenter's modification
  • 2:00 - Entry logic: breakout above high or below low
  • 3:00 - StrategyQuant X setup for NR4
  • 4:00 - Long entry condition (S&P 500 bias)
  • 4:20 - Entry order type: Stop order at High
  • 5:00 - Initial exit: after 2 bars
  • 6:00 - Adding ATR percentage to entry
  • 7:00 - Adding SMA 200 filter
  • 8:00 - Optimization parameters

Strategy overview

The Narrow Range 4 (NR4) pattern flags the bar with the smallest range of the last four — a contraction in daily volatility that traders read as coiling before expansion rather than as a direction in itself. What separates this entry from the generic version of the pattern is that it carries an author and a declared departure from him: the source video names Toby Crabel, whose 1990 work put narrow-range bars into the systematic trading vocabulary, and then spends its third chapter (1:30) placing Crabel's original NR4 side by side with the presenter's own modification. That chapter is the spine of the record — the pattern arrives already attributed, already amended, and the video is explicit about which is which.

The second half is not chart reading. After defining the setup and its trigger — a break of the narrow bar's high or low, covered at 2:00 — the video moves at 3:00 into StrategyQuant X, a backtesting and strategy-generation engine, which makes this a build session rather than a lesson: the pattern is being encoded and put through a platform, not drawn on a chart. Ali Casey's StatOasis channel works in that quantitative register throughout, and the daily bar on file matches the pattern's original swing-trading home.

The chapter list then closes at 4:00 on a long entry condition tied to an S&P 500 bias — index-specific and directional — with no short-side chapter following it and no results segment at all. Honest note on what this record does and does not hold: no test period, dataset or performance figures are stated by the source, and no mechanical rules were decoded from this video, so what is filed here is the pattern's logic, its attribution, and the shape of the build as the video presents it.

Topics

narrow range 4 · nr4 pattern · breakout strategy · trading strategy · pine script · tradingview strategy · technical indicators · s&p 500 strategy · us indexes trading · daily trading strategy · price action · swing trading

Frequently asked questions

What is the Narrow Range 4 (NR4) pattern?

NR4 identifies a bar whose high-to-low range is the smallest of the last four bars. It is a volatility-contraction signal: the pattern says the market has gone quiet, not which way it will go next, which is why it is treated as a setup condition rather than an entry on its own.

Who was Toby Crabel and does this video use his original definition?

Toby Crabel is the trader and author whose research on narrow-range days and opening-range behavior popularized NR4 as a systematic setup. The source video does not simply reproduce his version — it dedicates a chapter at 1:30 to contrasting Crabel's original NR4 with the presenter's own modification of it.

How does an NR4 setup become an actual trade signal?

The narrow bar defines the reference levels; the trigger comes from price leaving them. The video covers this at 2:00 as a breakout above the bar's high or below its low, so the contraction identifies the candidate and the expansion out of it supplies the direction.

Is this video a tutorial or a backtest?

It is a build session. From 3:00 the presenter moves the pattern into StrategyQuant X to set it up as a testable strategy, and the chapters end at 4:00 on a long entry condition with an S&P 500 bias — no results, test period or dataset are stated in the source, and Strategy Decoder files this entry as the pattern and its framing rather than a set of decoded rules.

About this strategy page

This trading strategy was decoded by Strategy Decoder's AI from a public YouTube trading video and turned into a structured, reviewable specification. In the interactive app this page shows the full entry and exit logic, risk management settings, the indicators involved with their parameters, AlgoWizard-compatible logic and a Pine Script export ready for TradingView backtesting — plus an automated backtest verdict when one has been computed for this strategy.

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