Precision volatility contraction breakout strategy with momentum ignition confirmation.
PulseSqueeze Ignition identifies high-probability momentum bursts by detecting periods of volatility contraction (Bollinger Bands inside Keltner Channels) followed by decisive price breakouts confirmed by RSI momentum and volume expansion. This creates a powerful filter that significantly reduces false breakouts common in traditional channel strategies.
Detects when Bollinger Bands compress inside Keltner Channels — a proven precursor to explosive moves.
Only triggers when price breaks the contraction zone with RSI momentum alignment and volume surge.
Dynamic position sizing based on 1% account risk with ATR-derived stops and targets for consistent R-multiples.
Step 1: Squeeze Detection
The system continuously monitors when the Bollinger Bands (20, 2) contract inside the Keltner Channels (EMA 20 ± 1.5×ATR). This compression signals a period of low volatility and building pressure.
Step 2: Ignition Trigger
A valid signal occurs only when price closes decisively outside the Bollinger Bands after a squeeze period has been present in the recent bars. This filters out noise.
Step 3: Multi-Confirmation
Long signals require RSI(14) above 55 and current volume exceeding 1.2× its 20-period average. Short signals use the inverse thresholds. This dramatically improves win quality.
High-resolution infographics illustrating signal detection and trade management sequence.
| Parameter Group | Setting | Value | Description |
|---|---|---|---|
| Bollinger Bands | BB Period | 20 | Standard deviation period for volatility measurement |
| BB Deviation | 2.0 | Width multiplier for upper/lower bands | |
| Keltner Channel | KC EMA Period | 20 | EMA base for dynamic channel |
| KC Multiplier | 1.5 | ATR multiplier for channel width | |
| KC ATR Period | 10 | ATR calculation length | |
| Filters & Risk | RSI Period / Long Th | 14 / 55 | Momentum gate for long entries |
| RSI Short Threshold | 45 | Momentum gate for short entries | |
| Volume Multiplier | 1.2× | Minimum surge vs 20-period average | |
| ATR Period / SL Multi | 14 / 1.5 | Stop loss distance | |
| TP Multiplier / Risk % | 3.0 / 1% | Take profit target & account risk per trade |
Every trade is sized to risk exactly 1% of account equity. Stops and targets are dynamically calculated using ATR to adapt to current market volatility.