Squeeze Momentum with different time frame

The Squeeze Momentum with different time frame indicator tracks market volatility and momentum by identifying "squeezes" based on the relationship between Bollinger Bands and Keltner Channels, with the added flexibility of multi-timeframe analysis.

Usage

This tool is used to identify periods of low volatility (the squeeze) followed by high-momentum breakouts. Traders typically look for the center line crosses to determine market direction:

• Momentum Histogram: A green histogram indicates bullish momentum, while a red histogram indicates bearish momentum. Bright colors suggest increasing momentum, while faded colors suggest a potential slowdown.
• Squeeze Dots: The center line dots indicate the squeeze state. A black dot (or chart foreground color) indicates a "Squeeze On" state, suggesting the market is consolidating. A gray dot indicates the "Squeeze Off" state, often where a breakout occurs. A blue dot signifies a neutral state.
• Multi-Timeframe Analysis: By adjusting the timeframe settings, users can view squeeze conditions from higher timeframes (e.g., Daily) on lower timeframe charts (e.g., 15-minute) to align with the broader market trend.

Details

The indicator is a variation of the popular Squeeze Momentum concept. It calculates volatility using two primary components:

1. Bollinger Bands: Measures standard deviation from a moving average.
2. Keltner Channels: Measures volatility based on the Average True Range (ATR) or high-low range.

A "Squeeze" occurs when the Bollinger Bands trade within the Keltner Channels, signaling a period of extreme price compression. 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 over a specified period.

Settings

Timeframe Settings

• Use Current Chart Resolution?: When enabled, the indicator uses the timeframe of the current chart.
• Use Different Timeframe?: If the current resolution is disabled, this setting allows you to specify a custom timeframe (e.g., D, 4H, 1H) for the calculations.

Indicator Settings

• BB Length: The lookback period used for the Bollinger Bands calculation.
• BB MultFactor: The standard deviation multiplier for the Bollinger Bands width.
• KC Length: The lookback period used for the Keltner Channels calculation.
• KC MultFactor: The multiplier applied to the range for Keltner Channel width.
• Use TrueRange (KC): When enabled, uses the True Range for Keltner Channels; otherwise, it uses the simple high-low range.

FAQ

How do I interpret the histogram colors?

Bright green indicates bullish momentum is increasing, while dark/faded green suggests it is weakening. Bright red indicates bearish momentum is increasing, while dark/faded red suggests it is weakening.

What does it mean when the squeeze is "On"?

When the squeeze is "On" (center dots change color), it indicates that the market is in a period of low volatility. Historically, these periods are often followed by significant price moves once the squeeze "fires" (dots turn gray).

How can I access Squeeze Momentum with different time frame?

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