Bollinger Breakout and Squeeze Entries with ATR Risk Management

Summary

This strategy combines a Bollinger Band breakout oscillator, a volatility squeeze signal, and ATR bands to define entries and exits. For a long trade, bullish breakout power must cross above a threshold while the squeeze indicator shows its green state; shorts use the corresponding bearish power crossing and the same squeeze condition. The author describes the squeeze as a way to identify volatility conditions, while the oscillator supplies directional confirmation.

The stop is placed at a smoothed ATR band, and position quantity is calculated from account equity, a selected risk percentage, and the entry-to-stop distance. A take-profit target uses a configurable risk-reward multiple. The code also moves the stop to entry after price reaches a favorable threshold, although its exit logic uses a 0.75-risk move, which differs from the accompanying description of moving to breakeven at half the target distance. The document provides rules and code, but no performance results or validation across markets; settings, execution costs, and behavior should be tested before use.

Key ideas

• Long and short entries require a breakout-power crossover above a selected threshold and a green squeeze state.
• ATR bands set the initial stop, and the entry-to-stop distance informs equity-based position sizing.
• Take-profit levels are set using a configurable risk-reward multiple.
• The exit code moves the stop to breakeven after a favorable move of 0.75 initial risk, despite a different threshold in the written description.
• The document gives no backtest results or evidence of performance across instruments.

Tags

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