SmartMA/STRATEGIES/Volatility_Squeeze.md

Volatility Squeeze Strategy (with SmartMA MT5)

Concept:
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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Setup

• Timeframe: 30 min, 1 hour, or 4 hour (works on most timeframes)
• Asset: Any (FX, indices, gold, crypto)
• Indicator: SmartMA MT5 (default settings or custom squeeze threshold)

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Entry Rules

1. Squeeze Detection:

   • SmartATR (risk band) is at or near its lowest value in the last 50 bars (e.g., < 0.7x the average)
   • SmartMA regime is “Range” or “Neutral”

2. Breakout Confirmation:

   • Wait for price to close outside the recent squeeze range
   • SmartATR increases sharply (e.g., > 1.2x its value on previous bar)
   • SmartMA regime flips to “Trend”

3. News Filter:

   • No new trades if current or breakout bar is “frozen” (SmartMA news filter)

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Stop Loss & Take Profit

• Stop Loss:
  1.2 x SmartATR from entry price
• Take Profit:
  2x stop distance, or use a trailing stop with SmartMA risk band

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Example Pseudocode

If (SmartATR < 0.7 * average_ATR) over last 50 bars AND (SmartMA.regime == "Range"): Mark squeeze zone If (price breaks out of squeeze) AND (SmartATR rises > 1.2x previous) AND (SmartMA.regime == "Trend") AND (not frozen): Enter in breakout direction SL = Entry -/+ 1.2 * SmartATR TP = Entry -/+ 2 * stop

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Why This Works

• Squeezes often precede the biggest moves—this strategy catches them with confirmation!
• ATR and regime filters reduce “false” breakouts in low activity periods
• News filter keeps you out of chaos

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SmartMA MT5 – Find the calm before the storm, and trade the breakout with context!