Squeeze Momentum Indicator

The Squeeze Momentum Indicator [AGPro Series] tool is a premium lower-pane volatility and momentum engine designed to track market compression and release cycles with structural nuance. Unlike traditional squeeze indicators that provide binary conditions, this script evaluates the quality and persistence of directional pressure following a volatility expansion.

Usage

The Usage section focuses on identifying the state of the market through the combined volatility and momentum workflow.

• Squeeze Detection: When the zero-line markers indicate a squeeze, the market is in a period of volatility compression (Bollinger Bands within Keltner Channels). This is the preparation phase.
• Expansion & Bursts: A "Bull Burst" or "Bear Burst" occurs when the squeeze releases and momentum clears the adaptive balance zone. These signals suggest a high-energy directional move is underway.
• Momentum Persistence: Once a move is initiated, the histogram transitions through "Drive" phases (continuation) and "Fade" phases (momentum cooling). These visual cues help traders distinguish between healthy expansion and moves losing structural energy.
• Release Boxes: When enabled, rectangular zones highlight active expansion phases, making it easier to scan for sustained trends across multiple bars.

Details

The script's engine operates by first establishing a volatility framework using the relationship between Bollinger Bands and Keltner Channels. Once a squeeze is identified, the indicator transitions into a proprietary momentum model.

Instead of a standard linear regression formula, the engine blends three specific components:

1. Displacement from Equilibrium: Measuring price distance from an anchor relative to ATR.
2. Equilibrium Velocity: Tracking the speed at which the anchor itself is moving.
3. Path Efficiency: Evaluating how cleanly price is traveling over a lookback period.

These components are processed through an adaptive threshold system consisting of a "Balance Band" and a "Burst Band." This ensures the indicator remains sensitive to the specific volatility regime of the asset and timeframe being analyzed.

Settings

Core

• Source: The primary price source used for all calculations.
• BB Length/StdDev: Parameters for the Bollinger Band volatility envelope.
• KC Length/ATR Multiplier: Parameters for the Keltner Channel containment envelope.
• Use True Range For KC: Toggle to use True Range instead of raw high-low range.

Momentum Engine

• Equilibrium Length: The EMA period used as the anchor for displacement and velocity.
• Velocity Length: Smoothing applied to the directional velocity component.
• Momentum Smoothing: Final smoothing applied to the blended momentum output.
• Adaptive Band Length: The lookback period for calculating dynamic balance and burst zones.
• Burst Band Multiplier: Sensitivity control for the expansion thresholds.

Visuals & Signals

• Show Adaptive Momentum Zones: Toggles the background bands in the oscillator pane.
• Show Release Boxes: Enables the rectangular burst highlighting.
• Min Release Quality: Minimum score required to trigger a release label.
• Min Cooling Quality: Threshold for identifying fading momentum energy.

FAQ

How do I interpret the different histogram colors? The histogram uses four states: bright colors indicate strengthening expansion (Bullish/Bearish), while darker or muted shades represent fading directional pressure.

What is the difference between a "Squeeze" and a "Burst"? A squeeze is a state of low volatility where price is consolidating. A burst is the subsequent release of that energy where momentum confirms a directional move.

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