Trading Bollinger and Keltner Squeeze Breakouts with Risk Controls
Summary
This strategy uses Bollinger Bands and Keltner Channels to identify periods of compression, then enters when a confirmed candle closes beyond the channel boundary. It supports long and short trades, with optional squeeze checks across lower and higher timeframes, a configurable entry window after a squeeze ends, and an option to limit entries to one per breakout. The supplied defaults include standard band and channel settings, but these are configurable.
Stops can be set as a percentage from entry or at the breakout candle's extreme; an optional dollar-loss cap can tighten the stop. The strategy targets a configurable multiple of risk and can move the stop to breakeven after price reaches a selected risk threshold. The document gives implementation details and release notes but no tested performance results. Multi-timeframe settings, position sizing assumptions, costs, and fill behavior may affect outcomes, so the rules alone do not establish profitability.
Key ideas
- A squeeze is defined as both Bollinger Bands lying inside the Keltner Channel.
- Long and short entries trigger on a confirmed close beyond the corresponding Keltner boundary.
- Optional timeframe filters and a grace window control which squeeze breakouts qualify.
- Stops may use a fixed percentage or the breakout candle's high or low, with an optional dollar cap.
- A risk-multiple target and breakeven stop adjustment define the exit plan.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.