Slingshot — the volatility squeeze, released.

The squeeze

Two volatility bands are drawn around price: Bollinger Bands, which react to standard deviation, and Keltner Channels, which react to ATR. When the Bollingers contract entirely INSIDE the Keltners, volatility has compressed to an extreme.

That state is the squeeze. Markets alternate between coiling and expanding, and a squeeze is the coil — a spring being loaded, with the release still to come.

The release

The trade is the first bar the bands expand back out — the squeeze ending. A squeeze tells you a move is coming but not which way, so momentum supplies the direction: upward momentum takes the long, downward the short.

Entering on the release rather than during the coil is what keeps it out of a compression that simply keeps compressing.

The settings that matter

The Keltner multiplier is the tightness dial, and it is the one that defines this playbook — how far inside the Keltners the Bollingers must sit before it counts as a squeeze. Tighter demands a more extreme coil and fires less often.

The band periods and the momentum lookback shape how quickly the whole thing reacts, and the ATR stop with a 2R target sizes the trade that follows.