Squeeze Momentum Indicator MTF with alerts [lazy bear]

The Squeeze Momentum Indicator MTF with alerts [lazy bear] tool provides a multi-timeframe perspective on price consolidation and momentum shifts by combining Bollinger Bands and Keltner Channels. It aims to identify periods of low volatility (squeezes) and the subsequent directional breakouts, allowing traders to monitor higher timeframe trends from a lower timeframe chart.

Usage

The indicator is primarily used to identify "squeezes" and momentum direction. A squeeze occurs when Bollinger Bands move inside Keltner Channels, suggesting a period of market compression that often precedes a significant expansion in volatility.

• Squeeze Dots: The center line displays dots indicating the squeeze state. A specific color indicates the squeeze is active (compression), while another indicates it has been released (expansion).
• Momentum Histogram: The histogram fluctuates above and below a zero line.
  • Bright Green: Increasing bullish momentum.
  • Dark Green: Decreasing bullish momentum.
  • Bright Red: Increasing bearish momentum.
  • Dark Red: Decreasing bearish momentum.

By observing these signals on a higher timeframe (e.g., 4H) while trading on a lower timeframe (e.g., 15m), users can align their trades with broader market trends.

Details

The script functions by calculating Bollinger Bands (based on Standard Deviation) and Keltner Channels (based on Average True Range or simple range) on a user-defined higher timeframe via the request.security function.

The momentum component is derived from a linear regression of the price relative to the average of the highest high, lowest low, and a simple moving average. This creates an oscillator that reflects the velocity of price movement. The "squeeze" is mathematically defined by the relationship between the boundaries of the Bollinger Bands and Keltner Channels.

Settings

SMI Entry Settings

• Higher Timeframe: Determines the timeframe from which the indicator data is pulled.
• BB Length: The period used for Bollinger Band calculations.
• BB MultFactor: The standard deviation multiplier for the Bollinger Bands.
• KC Length: The period used for Keltner Channel calculations.
• KC MultFactor: The multiplier for the Keltner Channel range.
• Use TrueRange (KC): When enabled, uses Average True Range for Keltner Channels; otherwise, uses the standard High-Low range.

FAQ

How do I access Squeeze Momentum Indicator MTF with alerts [lazy bear]?

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

What does the "Squeeze On" alert signify?

The "Squeeze On" alert triggers when the Bollinger Bands enter the Keltner Channels on the selected higher timeframe, indicating that the market is entering a low-volatility consolidation phase.

Can I use this for scalping?

Yes, by setting the "Higher Timeframe" input to a period like 1-hour or 4-hour, you can use the momentum signals to filter trades on 1-minute or 5-minute scalping charts.