Bollinger squeeze
Tests whether unusually narrow bands precede a tradable volatility expansion.
Use the one-page practice checklist
Keep the exact settings, long and short triggers, stop, no-trade filters and management rule beside the chart while you replay this method.
Worked example for demo practice, not a live trade signal.Keep the chart simple
What needs to be in place first
- Squeeze threshold is percentile-based or fixed
- Minimum duration is met
- Direction rule is independent of hindsight
See bollinger squeeze from both sides
Choose a direction and follow the chart from setup to entry, stop and planned exit. The method stays the same; only the directional comparisons reverse.
Entry is above the trigger, invalidation is below the setup and a profit exit is above the entry.
- EEntryLONG ENTRY — next H1 open
- SStop / risk limitSTOP — opposite frozen range
- TTargetTARGET — fixed 2R
The H1 visual labels both canonical envelopes explicitly. The upper release enters next open, the stop is the opposite side of the frozen six-bar range and the target is exactly 2R.
NO TRADE when the release candle exceeds 2 ATR(20), spread is above 1.5 pips, no release occurs within ten bars, or the next-open gap exceeds 0.5 ATR.Check the market first
At least six consecutive squeeze-on bars have completed and the frozen range predates the release bar.
Wait for the entry rule
Enter at the next H1 open in the direction of the first eligible release close.
Place the stop before entry
Place stop at the opposite side of the frozen six-bar range. Risk 0.50% equity, rounded down to 0.01 lot.
Know how the trade ends
Take profit at 2R. Exit at market after 16 completed H1 bars if unresolved.
Worked example: Bollinger-inside-Keltner release
This version of Bollinger squeeze chooses one answer for every decision so you can repeat it. Treat the settings as a starting point to test, not as proven or recommended parameters.
EUR/USD and GBP/USD H1 UTC candles; both directions.
All bands use completed closes and at least 100 warm-up bars.
The squeeze classifies compression only; direction comes from the price close.
Bollinger Bands: SMA(20) of close ±2 population standard deviations.
Keltner Channel: EMA(20) of typical price ±1.5 × Wilder ATR(20).
Define squeeze-on when both Bollinger Bands are strictly inside the Keltner Channel for at least six consecutive completed bars; freeze the six-bar price high and low.
Give every tool one job
Direction, timing, volatility and risk are different questions. This stack assigns them rather than asking one indicator to do everything.
Measures standard-deviation compression and supplies the release-band test.
Provides the independent ATR-envelope comparison used to define squeeze-on.
Prevents the bands alone from choosing direction and defines the structural stop.
- At least six consecutive squeeze-on bars have completed and the frozen range predates the release bar.
- The release candle closes outside both the frozen price range and its corresponding Bollinger Band.
- Release-candle range is no greater than 2.0 × ATR(20), and displayed spread is no more than 1.5 pips.
Enter at the next H1 open in the direction of the first eligible release close.
Place stop at the opposite side of the frozen six-bar range. Risk 0.50% equity, rounded down to 0.01 lot.
Take profit at 2R. Exit at market after 16 completed H1 bars if unresolved.
Cancel if no release occurs within ten bars after the sixth squeeze bar, the release is oversized, next-open gap exceeds 0.5 ATR, or spread fails.
Use a constant 1.2-pip spread and 0.2-pip adverse slippage on each fill; zero commission and 0.5 pip per rollover crossed.
Move through the chart one decision at a time
- Bars −8 to −3: contract
Both Bollinger Bands remain inside the Keltner Channel for six completed EUR/USD H1 bars.
- Bar −3: freeze range
The six-bar high is 1.0860 and low is 1.0830; those levels do not expand as later bars appear.
- Bars −2 to −1: wait
Price remains inside the range. Narrow bands do not provide a directional entry.
- Bar 0: release
The candle closes at 1.0865, above both 1.0860 and the upper Bollinger Band; its range is 1.3 ATR and spread passes.
- Bar +1: enter
Enter at next open, set stop at 1.0830, calculate 0.50% risk and set target at exactly 2R.
- Bars +2 onward: resolve
Record stop, target or bar-16 time exit; a later band re-entry is descriptive but not an extra exit rule.
A rejected example
Reject a dramatic breakout candle measuring 2.6 ATR. The move may continue, but this frozen method treats the next-open chase and slippage exposure as outside scope.
Common variations
- Separate variant only: bandwidth below its rolling 10th percentile instead of Bollinger-inside-Keltner.
- Separate variant only: opposite-band trailing exit.
- Separate variant only: retest entry after the release close.
Rebuild this method on the platform you use
The written rules work independently of the charting app. Match the same feed, timeframe, indicator settings and completed-candle timing before comparing results.
MT4
Manual rulesThe rules can be followed manually, but one or more requested chart tools need custom code on this platform.
MT5
Manual rulesThe rules can be followed manually, but one or more requested chart tools need custom code on this platform.
TradingView
Manual rulesThe written rules can be followed manually. WickAtlas does not currently provide an automated strategy or trading bot.
TradingView indicatorsWickAtlas TradingView guideTest on a demo account first. Platform access does not validate a strategy or make a result likely. Compare the platforms.
Keep every test organised.
The CSV gives you one place to record the setup, costs, execution, outcome and whether you followed your rules.
Download test-plan CSV ↓