Momentum Squeeze Candle

The Momentum Squeeze Candle indicator identifies volatility compression periods and provides directional momentum signals based on institutional accumulation and distribution patterns.

Usage

The Usage section describes how the script can be used to identify consolidation and potential breakout directions. Users should first select a squeeze detection method that aligns with their trading style.

• Squeeze Detection: When a squeeze is active, candles are colored blue (by default), indicating a period of volatility compression where a breakout is likely to occur.
• Momentum Signals: While in a squeeze, the indicator plots colored circles at the bottom of the chart to suggest the likely breakout direction:
  • Green Circles: Indicate bullish momentum and potential institutional accumulation.
  • Red Circles: Indicate bearish momentum and potential institutional distribution.
• Breakout Execution: Traders typically monitor for the end of the blue candle sequence and trade in the direction of the momentum circles provided during the squeeze.

Details

The script utilizes a multi-layered approach to detect both volatility and institutional activity:

• Six Detection Methods: It includes classic TTM Squeeze logic (BB + KC), ATR Ratio, Choppiness Index, BB Width, Volume Contraction, and a Hybrid method that requires multiple conditions to be met simultaneously.
• Wyckoff Logic: It incorporates institutional analysis by looking for "ATR compression + drying volume" for accumulation and "ATR expansion + surging volume" for distribution.
• Momentum Priority: Direction is determined using a priority system: Wyckoff signals take precedence, followed by RSI thresholds (55/45), and finally price slope confirmation.

Settings

Squeeze Settings

• Squeeze Detection Method: Select the algorithm used to define a "squeeze" (Classic, ATR, Choppy, BB Width, Volume, or Hybrid).
• BB/KC/ATR Length: The lookback period for Bollinger Bands, Keltner Channels, and ATR calculations.
• BB Std Dev: Standard deviation for the Bollinger Bands.
• KC ATR Multiplier: ATR multiplier for the Keltner Channels.
• Squeeze Sensitivity: Adjusts the strictness of squeeze detection (higher values result in fewer, stricter squeeze signals).
• Thresholds: Specific settings for ATR Ratio, Choppiness, and BB Width methods.
• Hybrid Min Score: Number of concurrent methods required to trigger a signal when using the Hybrid method.

Visual Settings

• Show Momentum Triangles: Toggles the visibility of the bullish/bearish momentum circles.
• Color Candles During Squeeze: Toggles candle highlighting when a squeeze is active.
• Show BB and KC Bands: Displays the underlying bands on the chart for visual reference.

FAQ

How do I access the Momentum Squeeze Candle?

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

Which squeeze method is best for scalping?

For short-term scalping (1m-5m), the "Volume Contraction" method is often recommended as it highlights drying liquidity before quick bursts of activity.

Can I use this on any timeframe?

Yes, the script is designed to be timeframe-agnostic and works on all asset classes, though sensitivity settings may need adjustment for extremely high or low volatility environments.