BBW-Squeeze alerts

The BBW-Squeeze alerts indicator monitors Bollinger Bandwidth (BBW) to identify periods of low volatility and potential price breakouts through automated visual and audio alerts. It tracks current bandwidth relative to historical lows and user-defined thresholds to pinpoint "squeeze" conditions where price consolidation often precedes significant market moves.

Usage

The BBW-Squeeze alerts tool is primarily used to identify market "coiling" phases. When the blue BBW line drops significantly, it indicates that volatility is contracting.

The indicator provides visual cues via background highlights:

• Green Highlight: Occurs when the current BBW drops below the historical lowest BBW of the lookback period, signaling an extreme squeeze.
• Blue Highlight: Occurs when the BBW is below the user-defined "Highlight BBW under %" threshold but above the historical low.

Traders typically use these signals to prepare for an expansion in volatility. An alert is triggered when these conditions are met, allowing users to monitor multiple assets for potential breakout opportunities without constant chart observation.

Details

The indicator calculates Bollinger Bandwidth by taking the difference between the Upper and Lower Bollinger Bands and dividing it by the Basis (SMA). This value is then expressed as a percentage to normalize volatility measurement across different price levels.

The script maintains a trailing "lowest" value of the BBW over a specified lookback period (defaulting to 180 bars). By comparing the current bandwidth to this trailing low, the script can objectively identify when the market is at its quietest point relative to recent history. The alerts are optimized for "once per bar close" to avoid repetitive triggering during intraday fluctuations.

Settings

Main Settings

• Source: Determines the price data used for the Bollinger Band calculations (default is Close).
• Highlight BBW under%: A manual threshold used to trigger the secondary (blue) highlight and alert.
• Lowest Length: The lookback period used to determine the historical lowest bandwidth.
• Bollinger Band Length: The period used for the underlying SMA and Standard Deviation calculations.
• Bollinger Bands Standard Deviation: The multiplier for the bands, which directly influences the width of the squeeze detection.

FAQ

How do I access BBW-Squeeze alerts?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.

What does the red line represent?

The red line represents the lowest Bollinger Bandwidth value recorded over the "Lowest Length" period. It acts as a dynamic floor for volatility comparison.

Can I change the sensitivity of the squeeze detection?

Yes, you can increase the "Highlight BBW under%" to be notified of squeezes earlier, or adjust the "Lowest Length" to change how the historical extreme squeeze is calculated.