Bollinger Band Squeeze & Breakout Setup & Indicator Bollinger Bands: Period 20, StdDev 2 Timeframe: M30–H1 for more frequent squeezes Volume Filter: Low ATR² value or VIX-like index Entry Identify the squeeze: Bands move close together (bandwidth < 0.5 × average). Breakout: Price closes outside the upper band → Long, or outside the lower band → Short. Exit & Trailing Stop-Loss: At the middle band (MA20) or a few pips back inside the band. Trailing: Fixed distance (e.g. 20–30 pips) or adaptive along the upper/lower band line. Risk Management Open positions only if volume (MT5 volume histogram) increases. No trading during high-impact news (news filter in EA). Example chart for the Bollinger Band Squeeze & Breakout setup Here is an example chart of the Bollinger Band Squeeze & Breakout setup: Upper panel (Price with Bollinger Bands): Yellow line: Closing price Dotted lines: Upper and lower bands (BB20,2) Red line: Middle band (MA20) ▲ Long breakout: Close after a squeeze above the upper band ▼ Short breakout: Close after a squeeze below the lower band Lower panel (Bandwidth): Yellow line: Bandwidth = (Upper – Lower Band) / MA20 Dashed line: Squeeze threshold = 0.5 × average bandwidth Explanation Squeeze phase: When bandwidth falls below the threshold, it indicates low volatility. Breakout: After a squeeze, if the price closes outside the bands, a long (upper) or short (lower) trade is generated. Volume filter & news: In practice, ensure volume (e.g. MT5 volume histogram) increases and no high-impact news is scheduled before entering a trade. Stop-Loss & Trailing: Stop near the middle band or a few pips back; trailing stop fixed (20–30 pips) or dynamically along the band. This chart provides a visual template of how squeeze phases and subsequent breakouts appear in the M30–H1 context.
