BOLLINGER BANDS PRO Trading Guide

The Bollinger Bands Pro (Squeeze & Reversal Edition) is an institutional-grade volatility band indicator. It builds upon traditional Bollinger Bands by integrating Keltner Channels to identify volatility squeezes, incorporating Carter Squeeze Momentum, and generating clear breakout and mean-reversion reversal signals.

Key Features

• Volatility Squeeze Detection: A squeeze occurs when Bollinger Bands contract completely inside the Keltner Channels, representing compressed volatility. When the bands expand back outside the Keltner Channels, a high-velocity volatility release (breakout) is triggered.
• Carter Squeeze Momentum: The middle band is color-coded segment-by-segment using the slope of a linear regression of price momentum, showing the rate of change and direction of momentum during squeezes and releases.
• Comprehensive Strategy Signals:
  • Squeeze Buy (sqz_buy): Volatility breakout from a squeeze with positive momentum.
  • Squeeze Sell (sqz_sell): Volatility breakout from a squeeze with negative momentum.
  • Reversal Buy (rev_buy): Price pierces the Lower Band and closes back inside with a bullish candle and recovering momentum.
  • Reversal Sell (rev_sell): Price pierces the Upper Band and closes back inside with a bearish candle and declining momentum.

What does the indicator show?

• Upper & Lower Bands: Dynamic standard deviation bands (sky blue and pink) serving as volatility boundaries.
• Middle Band (Basis): Smooth MA basis line color-coded by squeeze momentum trend:
  • Bright Green: Positive rising momentum.
  • Dark Green/Teal: Positive falling momentum.
  • Bright Red: Negative falling momentum.
  • Dark Red/Orange: Negative rising momentum.
• Band Cloud Shading: Dynamic cloud coloring representing market state:
  • Amber Cloud: Squeeze active (low volatility/accumulation).
  • Green Cloud: Bullish breakout release active.
  • Red Cloud: Bearish breakout release active.
• Signal Tags: Clean visual tags drawn directly on the chart when entry criteria are met.

Trading Strategies

• Squeeze Breakouts: Wait for the cloud to turn amber (squeeze active). Enter in the direction of the first momentum breakout signal when the cloud changes color (Green for Long, Red for Short).
• Band Mean Reversion: In sideways markets, use the rev_buy and rev_sell tags to buy low near the lower band and sell high near the upper band.