Hourly Bollinger + 5-Min Squeeze

Entry Logic

• Entry trigger: 5-minute chart shows a breakout of a Bollinger Band squeeze.
• Confirmation: The hourly chart shows the Bollinger Bands are contracting, indicating a potential for a large move.
• Timeframe: Hourly for Bollinger Band context, 5-minute for squeeze entry.
• Location: Entry taken on the breakout of the 5-minute squeeze.
• Market condition: Low volatility period followed by a high volatility breakout.

Exit Logic

• Profit target: 2x the width of the hourly Bollinger Bands.
• Scaling out: Scale out 50% at 1x the width of the hourly Bollinger Bands.
• Trailing stop: Trail stop on the opposite side of the 5-minute Bollinger Bands.
• Signal failure: Exit if the breakout fails and price re-enters the squeeze.
• Opposite signal: Exit on a reversal pattern on the 5-minute chart.
• Time expiration: Exit if the trade is not profitable within 1 hour.
• Momentum loss: Exit if volume dries up after the breakout.

Stop Loss Structure

• Hard stop: At the midpoint of the 5-minute squeeze.
• Soft stop: A close back inside the squeeze.
• Max dollar loss: $100 per trade.
• Max percent loss: 0.5% of account.
• Structural stop: Below the breakout candle on the 5-minute chart.

Risk Management Framework

• Risk per trade: 0.5% of account.
• Daily limit: 3 losing trades.
• Weekly limit: 4% drawdown.
• Max drawdown: 12%.
• R:R requirement: Minimum 2:1.

Position Sizing Model

• Sizing approach: Fixed fractional, 0.5% of account per trade.
• Volatility adjustment: Not used in this strategy.
• Conviction sizing: A+ setups get 1% risk.
• Scaling in: Not used in this strategy.
• Scaling out: 50% at the first profit target.

Trade Filtering

• Market conditions: Only trade when the hourly Bollinger Bands are squeezing.
• Setups: Only trade breakouts from a 5-minute squeeze.
• Instruments: Volatile stocks.
• Time restrictions: Any time of day.
• Chop/news avoidance: Avoid trading before major news releases.

Context Framework

• Trend direction: Not a primary factor, but breakouts in the direction of the daily trend are preferred.
• VWAP relationship: Price should be breaking away from VWAP.
• MA relationship: 5-minute MAs should be crossing over in the direction of the breakout.
• Range location: Entry is at the breakout of a consolidation.
• Higher TF alignment: Not required, but helpful.

Trade Management Rules

• Breakeven: Move stop to breakeven after a 1R move.
• Scale out: At the first profit target.
• Add size: Not used in this strategy.
• Fast vs slow moves: Let fast moves run.

Time Rules

• Optimal window: Any time of day.
• Times to avoid: Low-volume periods.
• Session notes: Squeezes can happen at any time.

Setup Classification

• A+ setup: Tight hourly Bollinger Bands, clean 5-minute squeeze breakout.
• A setup: Good hourly squeeze, but 5-minute breakout is messy.
• B setup: Hourly Bollinger Bands are not very tight.
• C setup: No squeeze.

Market Selection Criteria

• Instruments: NFLX, ROKU, ZM.
• Volume: Minimum 2 million shares traded daily.
• Volatility: High intraday volatility.

Statistical Edge Metrics

• Win rate: 55%.
• Avg win: 2.5R.
• Avg loss: 1R.
• Profit factor: 1.375.
• Expectancy: 0.375R per trade.

Failure Conditions

• Strategy fails when the breakout is a fakeout.
• Avoid using this strategy in low-volume markets.

Psychological Rules

• Patience is required to wait for the squeeze to develop.
• Quick execution is needed to catch the breakout.

Advanced Components

• Regime detection: Use the daily chart to identify the market regime.
• Filters: Avoid stocks with a large spread.
• Correlation: Check for correlation with the broader market.
• MTF alignment: Not required, but breakouts in the direction of the daily trend are higher probability.

Location

• Strongest: After a period of low volatility.
• Weakest: In a high-volatility, trending market.