Squeeze Timing-V2

The UCS_Squeeze_Timing-V2 indicator provides a comprehensive framework for identifying periods of low volatility and anticipating explosive price movements by combining Bollinger Band and Keltner Channel relationships.

Usage

The indicator can be used to identify "Squeeze" conditions and potential momentum breakouts. Traders typically look for the following:

• Squeeze Detection: When the central dots turn red, the Bollinger Bands have tightened inside the Keltner Channels, indicating a low-volatility "Squeeze" phase. A green dot indicates the squeeze has "fired" or released.
• Directional Bias: The histogram indicates price strength. If the histogram is above zero, the momentum is bullish; if below zero, it is bearish.
• Momentum Changes: Light green bars signify increasing bullish momentum, while dark blue bars suggest fading bullish strength. Conversely, bright red bars signify increasing bearish momentum, while orange bars suggest fading bearish strength.
• Trade Execution: A common strategy is to wait for the squeeze dots to change from red (on) to green (off), then enter in the direction indicated by the histogram color.

Details

This script enhances traditional squeeze momentum concepts by replacing the standard Rate of Change calculation with Bollinger Band %B. This adjustment allows for a smoother interpretation of price relative to its bands, making it easier to determine the direction of the eventual breakout.

The calculation logic determines the Squeeze state by comparing the Bollinger Band boundaries (based on standard deviation) against the Keltner Channel boundaries (based on Average True Range). When the bands contract within the channels, volatility is historically low, suggesting an imminent "fire" or expansion.

Settings

• BB Length: The lookback period used for the Bollinger Band basis (SMA) and Standard Deviation.
• BB MultFactor: The multiplier applied to the Standard Deviation to determine the width of the Bollinger Bands.
• KC Length: The lookback period for the Keltner Channel moving average and range calculation.
• KC MultFactor: The multiplier applied to the range (True Range or High-Low) to determine the width of the Keltner Channels.
• Use TrueRange (KC): When enabled, uses the True Range calculation for Keltner Channels; otherwise, uses the standard High - Low range.

FAQ

How do I interpret the histogram colors in UCS_Squeeze_Timing-V2?

The histogram colors represent the slope and position of the momentum. Green/Blue represent positive momentum (increasing/decreasing), while Red/Orange represent negative momentum (increasing/decreasing).

What does it mean when the dots are red?

Red dots indicate that a Squeeze is currently "On," meaning the Bollinger Bands are squeezed inside the Keltner Channels, and the market is in a period of consolidation.

How can I access this tool?

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