Trade breakouts from multi-day consolidation ranges. Identify compression, wait for a strong directional candle to break the range with volume.
Indicators Used
Bollinger Bands (20, 2)VolumeADX (14)ATR (14)
Rules
- Identify 5-10 day consolidation range
- Bollinger Bands must be squeezing (narrowing)
- Enter on daily close above range high
- Volume must exceed 2× 20-day average
- ADX rising above 20 from below
🛡️ Risk Management
- Stop Loss: Below the range midpoint
- Take Profit: Range height projected from breakout
- Trail stop using ATR × 2 after 1:1 R:R reached
Daily, Weekly
Timeframe
2.8:1
Target R:R
Moderate
Approach
💡 Pro Tip
Bollinger Band squeezes that last 8+ days produce the most explosive breakouts. Look for the bandwidth indicator at its lowest reading in 6 months.