Squeeze Breakout (Bollinger inside Keltner)

Entry Logic

Trigger: Bollinger Bands move outside Keltner Channels. Confirmation: Price breaks above/below a 20-period moving average. Timeframe: 15-minute chart for squeeze, 5-minute for entry. Location: Price action at the Bollinger Band. Market Condition: Low volatility transitioning to high volatility.

Exit Logic

Profit Target: 2.5 ATR from entry. Scaling Out: Scale 50% at 1.5R, 50% at 2.5R. Trailing Stop: Trailing 1 ATR below/above price. Signal Failure: Bollinger Bands move back inside Keltner Channels. Time Expiration: Close all positions after 3 hours if target not hit. Momentum Loss: Close if price stalls after moving 1.5 ATR.

Stop Loss Structure

Hard Stop: 0.75 ATR beyond the Keltner Channel, opposite breakout. Soft Stop: Price retests the breakout candle and fails. Max Dollar Loss: $220 per trade. Max Percent Loss: 0.55% of account. Structural Stop: Just outside the Keltner Channel.

Risk Management Framework

Risk Per Trade: 1.1% of account. Daily Limit: 3% max loss. Weekly Limit: 7.5% max loss. Max Drawdown: 11% from peak equity. R:R Requirement: Minimum 1:2.2.

Position Sizing Model

Sizing Approach: Fixed risk per trade. Volatility Adjustment: Smaller size for wider initial squeeze. Conviction Sizing: No conviction sizing. Scaling In/Out: Scale out as per exit logic.

Trade Filtering

Market Conditions: Avoid markets with flat Bollinger Bands. Setups: Clear Bollinger Bands inside Keltner Channels. Instruments: Liquid stocks, index ETFs. Time Restrictions: Avoid major economic reports. Chop/News Avoidance: No trades during FOMC announcements.

Context Framework

Trend Direction: Breakout can initiate new trend or resume existing. VWAP Relationship: Price often consolidates around VWAP during squeeze. MA Relationship: Price trading within a tight range of MAs. Higher TF: Daily chart shows prior consolidation.

Trade Management Rules

Breakeven: Move stop to breakeven at 0.7R. Scale Out: As per exit logic. Add Size: Never add to a winning trade. Fast vs Slow Moves: Tighten stops on fast moves, loosen on slower.

Time Rules

Optimal Window: 10:30 AM - 12:30 PM EST, 1:45 PM - 3:15 PM EST. Times to Avoid: First hour of market open. Session Notes: Squeezes often resolve mid-day.

Setup Classification

A+/A/B/C Criteria: A+: Tight squeeze, strong volume breakout. A: Clear squeeze, good volume. B: Looser squeeze, decent volume. C: Unclear squeeze, low volume.

Market Selection Criteria

Instruments: SPY, QQQ, NVDA, GOOGL. Volume: Average daily volume > 7 million shares. Volatility: ATR (14) between $0.80 and $2.50.

Statistical Edge Metrics

Win Rate: 52%. Avg Win: 2R. Avg Loss: 1R. Profit Factor: 1.56. Expectancy: 0.56R per trade.

Failure Conditions

Strategy Fails: False breakout. Price re-enters squeeze. Overall market is extremely volatile.

Psychological Rules

Mental Discipline: Patience for squeeze development. Act decisively on breakout. Avoid fading the breakout.

Advanced Components

Regime Detection: Use ADX for trend strength post-breakout. Filters: Volume spike filter on breakout. Correlation: Look for sector-wide squeezes. MTF Alignment: 15-min squeeze, 5-min entry, daily context.

Location

Strongest: After a period of low volatility. Weakest: During periods of high, sustained volatility.