Davis Volatility Squeeze Strategy (Volatility Squeeze / ADX)



Logic Explanation: The market won’t stay range-bound forever, nor will it trend in one direction forever. When volatility (Volatility) is compressed to the extreme, it usually triggers an extremely strong one-way move.

* Detailed Operation:

1. Set Indicators: Turn on Bollinger Bands and Keltner Channels.

2. Look for the Squeeze: When the Bollinger Bands are completely contracted **inside** the Keltner Channels, it indicates the market has entered an extreme period of stillness.

3. Direction Confirmation: Combine with the ADX indicator. When ADX begins to turn upward, and the price breaks through the upper Bollinger Band with increased volume.

4. Entry: Open a position in the direction of the breakout.

Case Analysis:

A certain altcoin went sideways for an entire two days, and the Bollinger Bands tightened into a straight line.

* Result: Once a breakout happens, the breakout power that has been building for a long time is extremely strong; it can usually achieve double or even higher returns.
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