Pattern Detail

Bullish Squeeze Alert

Three-candle bottom: each candle's range tucked inside the last, a tightening coil read as a wind-up before a bounce.

A real Bullish Squeeze Alert on NQ daily bars, Dec 24, 2008. Price then followed through 6.2% over the next 5 bars. The bright candles are the pattern; the dimmed bars are surrounding context.
A real Bullish Squeeze Alert on NQ daily bars, Dec 24, 2008. Price then followed through 6.2% over the next 5 bars. The bright candles are the pattern; the dimmed bars are surrounding context.
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How to read this

Everything here is in R, the setup's own risk. 1R is the distance from the entry (the pattern's closing price) to where it would be proven wrong — its lowest low over the 3 bars that form it. So "offered 2R" means price ran twice that distance in your favor at some point before the stop. It does not assume you took profit there: a target is a strategy choice.

Room offered (≥ 1R)

46.5%

Reliable

Offered at least 1× its risk before the stop, vs 42.8% for a random long entry (+3.7 pts).

Move size vs normal

1.11×

Realized range over the next 20 bars vs a random bar. Precedes a bigger move.

Typical room (20-bar)

1.22R

Average run in favor (capped at 3R), vs 1.10R for a random long entry.

Summary

Offered at least 1R of room 46.5% of the time vs 42.8% for a random long entry — a 3.7-point gap, wider than the ±3.2-point margin of error from chance, and it holds across the sample. A real, if modest, tendency to offer more room than the market alone.

Room offered, this setup vs a random long entry

Outcome This setup Random entry Edge
Offered ≥ 1R 46.5% 42.8% +3.7
Offered ≥ 2R 31.2% 27.3% +3.9
Offered ≥ 3R 21.1% 18.5% +2.6
Stopped < 1R 51.1% 53.6% -2.5
Went sideways 2.4% 3.6% -1.2

940 occurrences · 1,165,570 random-entry controls · 20-bar horizon

A squeeze alert is a three-candle bottom built on a tightening range. After a fall, each candle prints a higher low and a lower high than the one before, so the second fits inside the first and the third fits inside the second. The range coils down to a point. That squeeze is the wind-up: the fight between buyers and sellers is narrowing, pressure is building, and the break out of the coil often runs to the upside.

How to spot it

  • The market is falling into the pattern.
  • The first candle is a down (red) candle that fits the decline.
  • The second candle’s high and low both sit inside the first candle’s range.
  • The third candle’s high and low both sit inside the second candle’s range.
  • Each bar is narrower than the last, the range coiling tighter toward a point.

The dashed box on the chart above marks the three candles on a real occurrence, with the decline before and the move after.

The psychology

Price has been falling, and the first down candle carries that selling in. But each bar that follows is narrower than the last, tucked fully inside the range before it. A higher low says sellers can no longer drag price down to fresh lows, and a lower high says buyers cannot yet lift it back up. Neither side wins ground, and the range coils tighter toward a point.

That squeeze is a market holding its breath. The longer this goes on, the less the earlier selling looks like a one-way trend and the more it looks like an even fight that has run out of space to move. Pressure builds as the range narrows, and a coil that tight rarely stays quiet. When it finally breaks, the side that was being held back is released all at once. After a fall, that release often comes to the upside as the sellers, who could no longer make new lows, give way.

A coil tells you a move is coming but not which way it runs, and the numbers below test how often it breaks higher.

Does it actually work?

A pattern is a setup, not a trade, so the honest question is not “did it win” but “how much room did it tend to offer before it was proven wrong.” The tabs below answer that across five futures markets (Nasdaq, S&P 500, gold, crude oil, natural gas) and seven timeframes from one minute to one day.

For each occurrence we measure the room the move offered in units of the pattern’s own risk, then set it against what a random entry on the same market would have done. When the pattern offers more room more often than chance, that shows up as a real edge. When it does not, the page says so plainly.

Read it with the sample size in view. On the faster timeframes a pattern can fire thousands of times, enough to trust. On the daily chart it is far rarer, so treat those numbers as a hint rather than a verdict. Thin samples are flagged for you on the page.

How we measured it

  • Entry is the close of the final candle of the pattern.
  • One unit of risk, 1R, is the distance from that close down to the pattern’s invalidation point: the lowest low of the three candles that form it. If price trades through there, the setup is wrong.
  • We then follow the next 20 bars and record how far price ran in your favor, in multiples of that risk, before the stop was hit.
  • Every figure is set against a random entry on the same market and timeframe, so the market’s own drift is accounted for.
  • No profit target and no position sizing. Where you take profit is a strategy choice; this measures only the room the pattern tends to give.

What this page does not cover

  • Volume on the pattern’s candles.
  • Whether the pattern forms at a meaningful support level.
  • Pairing it with a trend filter or a confirming signal.
  • A profit target or position sizing. We use the pattern’s own invalidation point as the stop to define risk, but where you take profit, and how much you put on, are strategy decisions this page leaves to you.

Sample Bullish Squeeze Alert Firings (20)

Based on data through Apr 29, 2026

Time Risk (pts) Room offered Result
Apr 27, 2026, 7:35 PM CDT 20.25 0.54R Stopped
Apr 27, 2026, 2:00 PM CDT 8.75 0.00R Stopped
Apr 23, 2026, 7:55 AM CDT 52.5 1.78R Ran ≥1R
Apr 22, 2026, 7:55 PM CDT 20.25 0.09R Stopped
Apr 17, 2026, 8:40 AM CDT 76 1.98R Ran ≥1R
Apr 9, 2026, 11:15 PM CDT 4.75 0.00R Stopped
Apr 9, 2026, 9:10 PM CDT 4.25 0.00R Stopped
Apr 9, 2026, 5:35 PM CDT 11.5 0.78R Stopped
Apr 1, 2026, 4:00 AM CDT 36 0.21R Stopped
Mar 30, 2026, 4:25 AM CDT 14.25 0.00R Stopped
Mar 13, 2026, 8:11 AM CDT 18 1.08R Ran ≥1R
Mar 10, 2026, 7:15 AM CDT 17.75 1.80R Ran ≥1R
Mar 8, 2026, 9:05 PM CDT 25.75 1.07R Ran ≥1R
Mar 6, 2026, 8:15 AM CST 15.25 3.00R Ran ≥1R
Mar 6, 2026, 5:50 AM CST 8.5 0.00R Stopped
Feb 27, 2026, 2:45 PM CST 34.25 1.95R Ran ≥1R
Feb 10, 2026, 1:50 PM CST 8.25 2.64R Ran ≥1R
Feb 1, 2026, 8:05 PM CST 26.25 0.00R Stopped
Jan 29, 2026, 8:20 AM CST 16.25 0.00R Stopped
Jan 25, 2026, 8:55 PM CST 14 3.00R Ran ≥1R

Sample backtests (2)

Real backtested runs of this pattern, with commissions and slippage. Open one for the full equity curve and metrics, or backtest it yourself on your own contract and dates.

Backtest this pattern

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