Squeeze Breakout Pro

The Squeeze Breakout Pro indicator is a comprehensive volatility compression tool designed to identify high-probability breakout setups when Bollinger Bands contract within Keltner Channels. It automates the entire trade framework by qualifying squeezes with trend strength filters, defining structural risk levels, and projecting Fibonacci-based profit targets with an integrated performance dashboard.

Usage

The indicator can be used to identify periods of market consolidation and subsequent directional moves. Once a squeeze is detected and confirmed, the tool maps out a complete trade setup.

• Bullish Breakouts: Triggered when price closes above the squeeze range high with volume confirmation. The entry is marked with a "Long" label, and targets are projected upwards.
• Bearish Breakouts: Triggered when price closes below the squeeze range low with volume confirmation. The entry is marked with a "Short" label, and targets are projected downwards.
• Risk Management: Stop losses are automatically placed at the opposite structural boundary of the consolidation zone, adjusted by an ATR-based padding to account for market noise.
• Target Scaling: Take-profit levels (TP1, TP2, TP3) are calculated as R-multiples of the squeeze range width, allowing for systematic scaling out of positions.

Details

The script follows a structured multi-step pipeline to ensure signal quality:

• Volatility Compression: Detects the "squeeze" condition where Bollinger Bands are narrower than Keltner Channels.
• ADX Qualification: Uses the Average Directional Index (ADX) to ensure the market is genuinely range-bound (default < 21) rather than simply pausing in a strong trend.
• Duration Filter: Requires a minimum number of consecutive bars in a squeeze to ignore fleeting volatility fluctuations.
• Volume Validation: Analyzes relative volume during the breakout bar to confirm institutional participation, automatically bypassing this filter on instruments without volume data (e.g., certain Forex pairs).
• Statistical Tracking: The built-in dashboard tracks historical hit rates for each take-profit level versus the stop loss on the current timeframe and instrument.

Settings

Main Settings

• Squeeze Length: The lookback period for both Bollinger Bands and Keltner Channels.
• BB Multiplier: Standard deviation multiplier for Bollinger Bands; higher values increase squeeze frequency.
• KC Multiplier: ATR multiplier for Keltner Channels; controls the threshold for entering a squeeze.

Filters

• ADX Filter: Toggles the requirement for low directional movement during the compression phase.
• ADX Threshold: The maximum ADX value allowed for a squeeze to be considered valid.
• Volume Confirmation: Requires a volume spike relative to its moving average on the breakout bar.
• Min Squeeze Bars: The minimum duration (in bars) a squeeze must last to be valid.
• Prevent Overlap: When enabled, prevents the formation of new squeeze zones that overlap with recent ones.

Targets

• TP1 / TP2 / TP3 (R-Multiple): Sets the profit targets as multiples of the squeeze range width (e.g., 0.618, 1.0, 1.618).
• SL Padding (ATR%): The distance beyond the structural range high/low for stop loss placement, expressed as a fraction of ATR.

FAQ

How do I interpret the Squeeze Breakout Pro dashboard?

The dashboard provides real-time data on the current squeeze status, ADX values, and historical hit rates. "Pending" indicates a valid range is locked and waiting for a breakout, while the hit rates show the percentage of times TP1 and TP3 were reached historically on your chart.

What timeframes are best for this tool?

The indicator is versatile; lower timeframes (1m-5m) typically require shorter squeeze lengths and higher ADX thresholds, while higher timeframes (Daily) benefit from longer squeeze requirements and lower ADX thresholds to capture major trend shifts.

How can I get access to Squeeze Breakout Pro?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.