Trends/Volatility and bands

Bollinger squeeze

A stretch when the Bollinger bands are the narrowest they have been in a long time.

Volatility and bandsBest on 6M, 1Y, 3YAlso called squeeze

Illustration of the Bollinger squeeze shape. It is a sketch, not real price data.

What it shows

A squeeze is when bandwidth falls to its lowest level in the past six months or so. It means price has been unusually quiet. Volatility tends to come and go in cycles, so a quiet stretch is often followed by a busier one, though not in any fixed direction.

The squeeze describes the quiet. It does not say which way price will move when it ends.

How we find it

The same code that draws it on your chart follows these steps, with the same result every time.

Compute bandwidth for each bar.
Find the lowest bandwidth in the last 126 bars (about 6 months).
Mark a squeeze when the current bandwidth equals that low (within 5%).
Show how many bars the squeeze has lasted.

Starting values: Lookback 126 bars; Tolerance 5% of the low. These are proposed and will be tuned on real price data before launch.

How to read it

The gold zone marks the narrow bands.
The panel shows bandwidth at its low.
The longer the squeeze, the quieter price has been.

Status labels you may see

Label	What it means
In a squeeze	Bandwidth is within 5% of its 6-month low.
Just ended	The squeeze ended in the last 5 bars.
No squeeze	Bandwidth is above the threshold.

What cancels it

The squeeze ends when bandwidth rises above 105% of its 6-month low.

What traders check next

How long the squeeze lasted.
Which side price left the bands.
Volume when the squeeze ends.

Limits

The squeeze says nothing about direction.
Quiet periods can last a long time.
The lookback is a choice.

Try it in forecastviz

Open any ticker and choose Volatility and bands → Bollinger squeeze in the left menu.
Switch between 6M, 1Y, 3Y to see how the picture changes.
Compare with Bollinger bandwidth and Bollinger bands on the same chart.

Open on a ticker

Questions

Is a squeeze a signal?

It marks unusual calm. We make no claim about direction.

Who named it?

John Bollinger described it.