This article describes a professional trading strategy implemented in Backtrader that identifies low-volatility “squeeze” periods using Bollinger Bands and Keltner Channels, trading breakouts with momentum confirmation and managing risk with ATR-based trailing stops.

Strategy Overview

The Bollinger-Keltner Squeeze Breakout Trading Strategy integrates the following components:

• Custom Keltner Channels: Defines a volatility channel using a 30-day Simple Moving Average (SMA)
• Bollinger Bands: Identifies squeeze periods when volatility contracts
• ATR Trailing Stops: Manages risk and locks in profits

This strategy is designed for traders seeking to capitalize on volatility breakouts and manage risk effectively.