Bollinger Squeeze
Low volatility setups before big moves
How it works: Bollinger Band width contracts during consolidation, then expands during breakouts.
- Extreme Squeeze = Band width in bottom 5% of historical range (rare, high probability)
- Tight Squeeze = Band width in bottom 10% (good setup)
- Volatility is mean-reverting - low volatility precedes high volatility
- Direction of breakout not predicted - wait for confirmation
Bollinger Settings
Standard: 20-period, 2 std dev. Squeeze when width is in bottom 10%.