The quiet before the breakout
Breakout courses teach that the narrowest trading range in a week — an “NR7” day — is a coiled spring, and that in an uptrend it springs upward. This page is the rule, frozen, before the trades existed, including one place where our test differs from what is sold.
Signals are logged automatically after each close and graded five sessions later. No verdict language of any kind is computed before 2026-11-02, and none is computed then unless both sample floors below are met. The running count is in the live experiments report, regenerated by the scheduled job — and the verdict will be published here either way.
Why this one
Half of this claim is well documented. Toby Crabel showed decades ago that range contraction tends to be followed by range expansion: quiet days precede big days. That part is not in dispute.
The part that is sold is the direction — that the expansion will be upward. That is the half with no documented edge, and it is the half this experiment tests.
It is one of four techniques registered together on 2026-08-06, chosen from a survey of what is currently being taught and sold to retail traders. All four run on the same frozen universe and the same machinery as Experiment 03.
The rule, frozen
- Universe
- The same 40 liquid US large caps as Experiments 02 and 03, fixed at registration. Adding or removing a name voids the test.
- Entry condition (evaluated after the close)
- Today’s high–low range is strictly the narrowest of the last seven sessions, and the close is above the 200-day simple moving average. If more than five names qualify, take the five with the narrowest range relative to price first.
- Entry price
- The opening price of the next session. Signals are written to an append-only log before that open.
- Exits graded
- The same-day close (the scored horizon) and the fifth session’s close (reported).
- Costs
- 0.10% round trip, applied to every trade, declared up front so it cannot be tuned afterwards.
- Benchmark
- A day-matched control: the equal-weight return of the entire 40-name universe over the identical window, from the same data fetch. The scored quantity is the excess over that control, not the raw return — otherwise the test mostly measures whether the market went up.
- Window
- Only signals dated strictly after 2026-08-06 count. Nothing before the registration date is evidence.
A disclosed deviation from the version that is sold
The version taught in breakout courses buys an intraday break of the NR7 day’s range. Ours enters at the next session’s open, because every signal on this site must be logged before the market opens and nothing may act on the opening print. So what is tested here is the narrower claim — “contraction precedes upward expansion in uptrends” — not the intraday breakout rule itself. Every publication of this experiment, including the verdict, says so.
What it has to clear
Frozen at registration on 2026-08-06 and tightened once, on 2026-08-07, before a single outcome had been graded. The bar can only have got harder:
1. At least 30 post-registration graded signals, spread over at least 20 different companies. Thirty trades on four names is not thirty pieces of evidence.
2. The mean and the median day-matched excess positive, net of costs. Both, not either.
3. A 95% confidence interval on that excess that excludes zero, treating each company as the unit of evidence rather than each trade.
4. One look. The verdict is computed once, on the pre-declared date of 2026-11-02 (or at the first run after it where both floors are met), written to an append-only file, and never recomputed. Re-running the numbers later cannot turn a null into a pass.
And one correction for running many tests at once. This is one of eight experiments (02–09) running at the same time, each with roughly a one-in-six prior. About one chance pass is expected across the family. So a single pass is reported as consistent with chance until it survives a Benjamini–Hochberg correction across all eight, and then a fresh forward window. Experiments 06–09 share one universe, so they are correlated tests, not independent replications — how often they fire on the same day is reported alongside the verdicts.
The win rate is reported but is explicitly not a pass criterion.
What we expect to happen
Stating the prediction before the data is part of the method.
Our registered expectation is that the day-matched excess is indistinguishable from zero: contraction may well predict a bigger move, but not which way. We put the chance it clears the full bar at roughly one in six.
A quiet day predicting a big day is documented. A quiet day predicting an up day is the part people are paying for.
And if it does clear the bar, we will say so — and then say how many other things we tested at the same time, because that is the number that tells you how surprised to be.
How you’ll be able to check it
Every signal is written to experiments/EXP09-NR7-signals.csv before its entry session, and the graded outcomes alongside it — both public and append-only. The frozen rule lives in HYPOTHESES.md as H-EXP09 (registration batch #10), with the constants in experiment_harness.py. The verdict is written once to an append-only verdicts file, recorded in the audit log, and written up on this page.
If we change any constant in that rule, the test is void and we’ll say so. That’s the deal on every experiment here.
What this experiment is not
It is not a recommendation to trade this or anything else, and nothing here is advice. It is not a claim about any author, platform or educator — we test a published technique, never a person. And whichever way it lands, the verdict describes this rule, on these 40 names, over this window. It will not be evidence about volatility contraction (NR7) in general.
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