Momentum Squeeze Release

Entry Logic

• Entry trigger: The Bollinger Bands are inside the Keltner Channels (a squeeze), and then the price breaks out of the Bollinger Bands.
• Confirmation: Volume increases on the breakout.
• Timeframe: 15-minute chart.
• Location context: The squeeze occurs after a period of trending.
• Market condition: The market is consolidating before its next move.

Exit Logic

• Profit targets: 2R and 3R.
• Scaling out: Sell 50% at 2R.
• Trailing stop: Use the Keltner Channel as a trailing stop.
• Signal failure exit: Exit if the price closes back inside the Bollinger Bands.
• Opposite signal exit: Not applicable.
• Time expiration: Exit by the end of the day.
• Momentum loss: Exit if momentum slows down.

Stop Loss Structure

• Hard stop: Below the low of the breakout bar (for a long) or above the high (for a short).
• Soft stop: A close back inside the Bollinger Bands.
• Max dollar loss: 1% of account equity.
• Max percent loss: 2% of the trade's value.
• Structural stop: Below the low of the squeeze.

Risk Management Framework

• Risk per trade: 0.5% of account equity.
• Daily limit: 3 losing trades.
• Weekly limit: 10 losing trades.
• Max drawdown: 5% of account equity.
• R:R requirement: 2:1.

Position Sizing Model

• Sizing approach: Fixed fractional sizing.
• Volatility adjustment: Not applicable.
• Conviction sizing: A+ setups get full size, A setups get 75%, B setups get 50%.
• Scaling in/out: Scale out at profit targets.

Trade Filtering

• Market conditions: Avoid low-volatility markets.
• Setups: Only trade clear squeezes and breakouts.
• Instruments: Any liquid stock.
• Time restrictions: Not applicable.
• Chop/news avoidance: Not applicable.

Context Framework

• Trend direction: The 1-hour chart should be in a trend.
• VWAP relationship: Not applicable.
• MA relationship: Not applicable.
• Range location: The squeeze should occur in a clear consolidation pattern.
• Higher TF alignment: The daily chart should be in a trend.

Trade Management Rules

• Breakeven: Move stop to breakeven after 1R.
• Scale out: At profit targets.
• Add size: Do not add size.
• Fast vs slow moves: Let fast moves run.

Time Rules

• Optimal window: Not applicable.
• Times to avoid: Not applicable.
• Session notes: Can be used in any session.

Setup Classification

• A+ criteria: A long, tight squeeze with a powerful breakout.
• A criteria: A good squeeze with a clean breakout.
• B criteria: A short, loose squeeze with a marginal breakout.
• C criteria: Avoid.

Market Selection Criteria

• Instruments: Any liquid stock.
• Volume: Not a primary consideration.
• Volatility: The squeeze is a sign of low volatility, which is followed by high volatility.

Statistical Edge Metrics

• Win rate: 50%
• Avg win: 3R
• Avg loss: 1R
• Profit factor: 1.5
• Expectancy: 1R per trade

Failure Conditions

• When strategy fails: Fails when the breakout is a fake-out.

Psychological Rules

• Mental discipline: Be patient and wait for the squeeze to resolve.

Advanced Components

• Regime detection: The squeeze itself is a regime detection tool.
• Filters: Not applicable.
• Correlation: Not applicable.
• MTF alignment: Check the 1-hour and daily charts.

Location

• Where strongest: After a strong trend.
• Where weakest: In a choppy, directionless market.