It should likely be noted that Squid itself is not a firewall, but simply a proxy server. It may have configuration tools (which I am not familiar with) that allow it to control the built in firewall on your system. Your distribution has to support firewall enablement (or you have to build a custom kernel) for you to have a firewall.
I only want to mention this because you can not trust in the protection of Squid itself, you have to also know how to build and maintain a firewall. David gave a good link below for a script and a document about firewalls, I would strongly recommend if you plan to have this system directly on the internet that you read and attempt to understand the materials contained within that document.