A Scored Volatility Squeeze Breakout Strategy for Long Entries

Summary

This long-only strategy scores a potential squeeze setup using relative volume, the latest close-to-close price change, alignment between short and intermediate exponential averages, price relative to the short average, Bollinger Band width, and five-bar momentum. Higher volume and a larger positive price change contribute extra score points. A trade is allowed when price is above the short average, RSI remains below a configurable ceiling, and the total score reaches its threshold.

Open positions exit through a trailing stop or when price falls below the short average while recent momentum is sufficiently negative. The script includes chart markings and a compact dashboard for the score and selected inputs. It is presented for volatile equities, but supplies no backtest history, performance statistics, or evidence that its thresholds generalize across securities or timeframes. The score’s fixed cutoffs and trailing settings therefore require independent evaluation, with realistic costs and execution assumptions, before the method can support conclusions about expected returns.

Key ideas

• The entry score combines volume, price change, moving-average alignment, band width, and recent momentum.
• A long entry also requires price above the short EMA and RSI below its selected ceiling.
• Positions exit through a trailing stop or a defined momentum fade condition.
• The dashboard and chart markings expose the score and selected market conditions.
• The document gives no performance evidence, so thresholds and execution assumptions need independent testing.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.