Adaptive Regression Channel Breakouts with Relative Squeeze and Scaled Targets

Summary

This indicator combines a 50-bar linear regression channel with a squeeze measure that ranks current channel width against its range over the previous 100 bars. A signal occurs when price crosses a channel boundary after the prior bar met the squeeze condition. The entry is set at the breakout close; the opposite prior band acts as the initial stop, while three profit targets are spaced at multiples of the channel width. After the first and second targets, the stop advances to breakeven and then to the first target. The indicator permits only one open trade at a time and can draw past trade levels, pivot trendlines, and a small statistics panel.

The article explains why the squeeze is relative to recent instrument history and notes that this normalization can mislead when volatility changes persistently. Its performance panel is illustrative rather than a reliable backtest: same-bar target and stop touches depend on code order, breakeven trades count as wins, costs and slippage are omitted, and the per-trade Sharpe is not annualized. The document supplies indicator logic, but no independent performance results establishing an edge.

Key ideas

• The channel uses linear regression and standard deviation over the same lookback period.
• The squeeze threshold compares channel width with its recent range rather than a fixed absolute width.
• Breakout signals require a squeeze on the previous bar and a close crossing the channel boundary.
• Stops and three targets scale with channel width, with the stop moving after the first two targets.
• Reported win rate and per-trade Sharpe have limitations and do not establish a profitable backtest.

Tags

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