ATR, Bollinger Bands, Keltner Channels, and squeeze signals
Volatility-adjusted interpretation.
ATR, Bollinger Bands, Keltner Channels, and squeeze signals
| Concept | Explanation | |---|---| | ATR | Average True Range; measures recent price range and volatility, not direction. | | ATR breakout | Price movement exceeds a threshold based on recent ATR. | | Bollinger Bands | Moving average surrounded by bands based on standard deviation. | | Band expansion | Bands widen as volatility rises. | | Band squeeze | Bands narrow as volatility falls. | | Keltner Channel | EMA-based channel commonly using ATR for width. | | Squeeze momentum signal | Low-volatility condition, often identified when Bollinger Bands contract inside Keltner Channels. |
Key idea: Volatility contraction may precede a large move, but it does not identify direction.