Variety-Filtered, Squeeze Moving Averages

The Variety-Filtered, Squeeze Moving Averages indicator identifies low-volatility "squeeze" periods and potential breakout signals by comparing fast and slow moving averages against an ATR or pips-based volatility threshold. It serves as both a trend-following tool and a volatility filter, helping traders distinguish between choppy consolidations and high-momentum price expansions.

Usage

The indicator provides visual cues to help traders identify market phases. When the candles turn white and the threshold bands appear on the chart, the market is in a low-volatility "squeeze" or chop zone. During this period, the difference between the fast and slow moving averages is lower than the calculated volatility threshold.

A trade signal occurs when the price exits the threshold bands. An exit to the upside suggests a bullish breakout, while an exit to the downside suggests a bearish breakdown. This mechanism acts as a momentum squeeze trigger, alerting users to potential explosive moves following a period of consolidation.

Details

The core logic of the script relies on the distance between two user-selected moving averages. By default, it uses a 5-period and a 21-period moving average. The "squeeze" condition is met when the absolute difference between these two averages is less than a filter value.

Traders can choose between two filtering methods:

• ATR Filter: Uses a multiplier of the Average True Range to dynamically adjust the squeeze threshold based on recent market volatility.
• Pips/Ticks Filter: Uses a fixed point-based threshold, which is useful for markets with specific minimum price movement requirements.

The tool includes a vast library of over 35 moving average types (such as EMA, DEMA, KAMA, and Jurik-style filters) and expanded source types (including Heikin-Ashi and smoothed variants) to allow for highly customized trend detection.

Settings

Fast MA Settings

• Fast Heiken-Ashi Better Smoothing: Selects the smoothing algorithm (AMA, T3, or Kaufman) if using HAB source types.
• Fast Source: The price data point used for the fast moving average calculation.
• Fast MA Type: Selects from 35+ moving average variants for the fast line.
• Fast Period: The lookback length for the fast moving average.

Slow MA Settings

• Slow Heiken-Ashi Better Smoothing: Selects the smoothing algorithm for slow HAB source types.
• Slow Source: The price data point used for the slow moving average calculation.
• Slow MA Type: Selects from 35+ moving average variants for the slow line.
• Slow Period: The lookback length for the slow moving average.

Filter Settings

• ATR Period: The lookback period used for calculating the ATR volatility filter.
• ATR Multiplier: Adjusts the sensitivity of the ATR-based squeeze threshold.
• MA Threshold Ticks: Sets the fixed point distance for the squeeze filter when "Pips" is selected.
• Filter Type: Toggles between ATR-based or fixed Pips-based volatility filtering.

UI Options

• Color bars?: Enables or disables the white "squeeze" bar coloring.
• Show fill bands?: Toggles the visibility of the volatility threshold bands on the chart.
• Show signals?: Toggles the visibility of breakout and breakdown labels.

Moving Average Inputs

• Specific Parameters: These settings (FC, SC, Alpha, Offset, etc.) adjust the internal logic of specialized moving averages like FRAMA, KAMA, or Laguerre Filters.

FAQ

How do I interpret the white bars? White bars indicate that the market is currently in a squeeze phase, meaning volatility is low and the fast and slow moving averages are trading very close to one another relative to the filter threshold.

Can I change the sensitivity of the signals? Yes, you can increase the ATR Multiplier or MA Threshold Ticks to make the squeeze harder to trigger, or adjust the Fast and Slow MA periods to change how quickly the indicator reacts to price changes.

How do I get access to the Variety-Filtered, Squeeze Moving Averages? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.