Bollinger Band Squeeze Strategy – Backtest and Performance Insights

Volatility goes up and down in any financial market. Low volatility is often followed by periods of high volatility and vice versa. Bollinger Bands are one of the tools a trader can use to measure volatility. What is the Bollinger Band Squeeze about?

The Bollinger Band Squeeze strategy is about going in the same direction as the breakout after a period of low volatility. The assumption is that the breakout sets the tone of the action over the following days (or weeks – depending on the time frame).

Let’s dig in and see if we can make a profitable backtested Bollinger Band Squeeze strategy.