Using Bollinger and Keltner Band Compression as a Squeeze Signal

Summary

The document describes the Trade The Markets Squeeze indicator, which identifies periods when Bollinger Bands sit inside Keltner Bands. This band compression defines a potential trade zone and is presented as the indicator’s central signal concept. The display uses a histogram and labels around a center line.

Its configurable inputs control the Bollinger calculation period and deviation, as well as the Keltner period, smoothing period and method, and deviation; label size is also adjustable. The description does not specify whether a trader should enter long or short, how to time an exit, or how to size positions. It also supplies no backtest, performance evidence, or guidance on market and timeframe selection. As presented, the indicator marks a volatility-compression condition for further strategy design rather than providing a complete, validated trading system.

Key ideas

• The indicator marks a squeeze when Bollinger Bands fit inside Keltner Bands.
• It displays the identified zones using a histogram and signal labels.
• Its inputs allow adjustments to the band calculations, Keltner smoothing, and label size.
• The document does not define trade direction, entry and exit rules, or performance evidence.

Tags

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