Squeeze Momentum Entries from Volatility Release and Histogram Direction

Summary

This strategy adapts a squeeze momentum indicator that compares Bollinger Bands with Keltner Channels. It identifies a squeeze when the Bollinger Bands sit inside the Keltner Channels and treats the transition out of that state as a potential entry context. Long entries require the squeeze-state color to change to the release color while the momentum histogram is positive and rising; short entries use the corresponding negative and falling condition. An optional momentum threshold can filter weak readings.

The strategy closes positions when the histogram changes direction and also exposes stop loss, take profit, and trailing stop settings. The published script specifies indicator defaults, trading costs, and a custom backtest window for 2019, but provides no performance report or results in the supplied text. Its entries depend on indicator color-state logic and fixed defaults, so the description alone does not establish robustness across markets or parameter choices.

Key ideas

• The squeeze condition compares Bollinger Band width with Keltner Channel width.
• A transition out of the squeeze state combined with rising positive momentum signals a long entry.
• A corresponding negative, falling momentum state signals a short entry.
• An optional momentum threshold and configurable stop, target, and trailing exits are included.
• The supplied material gives a 2019 test window but no reported backtest outcomes.

Tags

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