61 lines
1.8 KiB
Markdown
61 lines
1.8 KiB
Markdown
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# Volatility Squeeze Strategy (with SmartMA MT5)
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**Concept:**
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Identify periods when volatility is exceptionally low (“squeeze”) using SmartMA’s ATR band—then trade the breakout when volatility suddenly returns.
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---
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## Setup
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- **Timeframe:** 30 min, 1 hour, or 4 hour (works on most timeframes)
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- **Asset:** Any (FX, indices, gold, crypto)
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- **Indicator:** SmartMA MT5 (default settings or custom squeeze threshold)
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---
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## Entry Rules
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1. **Squeeze Detection:**
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- SmartATR (risk band) is at or near its lowest value in the last 50 bars (e.g., < 0.7x the average)
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- SmartMA regime is “Range” or “Neutral”
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2. **Breakout Confirmation:**
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- Wait for price to close outside the recent squeeze range
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- SmartATR increases sharply (e.g., > 1.2x its value on previous bar)
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- SmartMA regime flips to “Trend”
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3. **News Filter:**
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- No new trades if current or breakout bar is “frozen” (SmartMA news filter)
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---
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## Stop Loss & Take Profit
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- **Stop Loss:**
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1.2 x SmartATR from entry price
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- **Take Profit:**
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2x stop distance, or use a trailing stop with SmartMA risk band
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---
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## Example Pseudocode
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If (SmartATR < 0.7 * average_ATR) over last 50 bars AND (SmartMA.regime == "Range"):
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Mark squeeze zone
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If (price breaks out of squeeze) AND (SmartATR rises > 1.2x previous) AND (SmartMA.regime == "Trend") AND (not frozen):
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Enter in breakout direction
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SL = Entry -/+ 1.2 * SmartATR
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TP = Entry -/+ 2 * stop
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---
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## Why This Works
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- Squeezes often precede the biggest moves—this strategy catches them with confirmation!
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- ATR and regime filters reduce “false” breakouts in low activity periods
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- News filter keeps you out of chaos
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---
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*SmartMA MT5 – Find the calm before the storm, and trade the breakout with context!*
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