Sign inCreate account
← Strategy library

Bollinger Squeeze Expansionbandwidth percentile breakout

Evidence: ModerateBeginnerVolatility · Breakout

Bandwidth = (upper − lower) ÷ middle. When it sits in the bottom 20th percentile of its own 120-bar history, the squeeze is on.

Entry on the first decisive close outside the band after the squeeze — but only when that bar carries genuine displacement.

Bollinger said it plainly himself: the squeeze tells you about timing, not direction. Direction needs its own confirmation, or this is a coin flip you are paying the spread on.

Category
Volatility · Breakout
Timeframe
H1 · H4 · D1 — the multi-timeframe variant is the strongest
Suitable pairs
EURUSD · USDCHF · EURGBP · AUDUSD · GBPUSD · XAUUSD
Session
The breakout usually comes at the London or New York open; the signal can be at any bar close
Indicators / tools
Bollinger Bands(20, 2) · Bollinger Bandwidth · rolling percentile · ATR(14)

Valid setup

S10 · BOLLINGER SQUEEZE EXPANSION — VALID SETUP AUDUSD · H4 · the squeeze times the move; it does not choose the direction LONG 0.6643 0.6702 0.6761 0.6820 0.6879 0.6938 0.6997 SQUEEZE — bandwidth in its bottom 20 % ENTRY = next bar open SL at the middle band (SMA 20) +2R reference 1R +2R 1 2 3 4 5 6 ① Bands wide — normal volatility, no setup ② Bandwidth drops into its bottom 20th percentile: squeeze ON (see the panel below) ③ Squeeze persists 6+ bars. A one-bar dip does not count. ④ CLOSE outside the band AND bar range > 1.2 × ATR(14) ⑤ Entry next bar open ⑥ Exit when close crosses back below the middle band, or when bandwidth reaches its top 20 % — at that point the expansion is already spent. 0.6913 0.6792 0.6731 BB upper (20, 2) BB middle = SMA 20 squeeze on expansion Bollinger Bandwidth percentile (120-bar) — squeeze = bottom 20 % 20 % 80 % %ile

Exact rules

Entry

  • Bandwidth = (BB upper − BB lower) ÷ BB middle, from BB(20, 2).
  • Squeeze gate: bandwidth's 120-bar percentile rank at or below 20, held for six or more consecutive bars.
  • Trigger: a close above the upper band for a long, or below the lower band for a short.
  • Displacement gate: the breakout bar's range > 1.2 × ATR(14), and its close more than 0.25 × ATR beyond the band. This gate is not optional — without it the strategy is a coin flip.
  • Enter at the next bar's open.

Stop loss

  • At the middle band, the 20-period average.
  • Or 1.5 × ATR(14), whichever is tighter.
  • After an expansion candle the middle band can be a long way off, so the stop comes out wide. That is this strategy's honest cost — manage it with position size, not by tightening the stop.

Take profit / exit

  • TP1 = 2 × the width of the squeeze range.
  • Trail at the middle band.
  • Volatility exit: when bandwidth reaches the top 20th percentile of its 120-bar history, treat the expansion as finished.

Build Bollinger Squeeze Expansion

Reading this page is free and always will be. Taking it is what costs — the complete MQL5 for the rules above, yours to keep, permanently. Five of them cost $10 and they never expire.

Sign inWhat it costs

More from Breakout

Opening Range Breakoutthe first thirty minutes set the dayATR Channel Breakouta level that moves with volatilityTrendline Breakoutthe level you drew yourself

Trading carries risk and most retail accounts lose money. Nothing on this page is financial advice or a recommendation to trade. The chart is an illustration of the rules on constructed candles — it is not a record of a trade and not a backtest.