The "Combined Squeeze Box and VWMA Strategy - 30m Candles" is a TradingView strategy designed for 30-minute candlestick charts, combining the Squeeze Box and Volume Weighted Moving Average (VWMA) methods. Here's a breakdown of how it functions:
Entry and Exit Conditions
Squeeze Box:
Entry (Long Position):
The market is in a 'squeeze' (determined by the Squeeze Percentage being less than the Relative Squeeze % Threshold).
The closing price is above the upper Bollinger Band.
The moving average (MA) is trending upwards.
The strategy is not already in a position.
Exit (Long Position):
The market exits the 'squeeze' state, and the closing price is below the moving average, which is not trending upwards.
Alternatively, if the MA starts trending downwards.
A take profit condition is also set, where the position is closed if the price reaches a set percentage above the entry price.
VWMA (Volume Weighted Moving Average):
This is used as an additional indicator for trend analysis but does not directly influence entry or exit conditions.
Components and Calculations
Squeeze Box:
Bollinger Bands are calculated using the standard deviation and a moving average.
Squeeze Percentage compares the current Band Width with the range over a specified period.
VWMA:
A volume-weighted moving average is plotted to provide insights into the trend influenced by volume.
Tips for Best Use
Confirm Trends: Use VWMA to confirm the overall market trend. An upward VWMA can be a good indicator to support long entries.
Risk Management: The take profit and stop-loss parameters should be adjusted according to your risk tolerance.
Watch Squeeze Dynamics: Pay attention to the squeeze dynamics. A squeeze indicates a potential breakout.
Backtesting: Always backtest the strategy with historical data to understand its performance in different market conditions.
Supplementary Indicators: Consider using additional indicators for further confirmation, like RSI or MACD.
Stay Updated: Keep abreast of market news and events, as they can significantly impact market movements and the effectiveness of technical indicators.
Remember, no strategy is foolproof, and it's essential to exercise caution and thorough analysis before making trading decisions.
Entry and Exit Conditions
Squeeze Box:
Entry (Long Position):
The market is in a 'squeeze' (determined by the Squeeze Percentage being less than the Relative Squeeze % Threshold).
The closing price is above the upper Bollinger Band.
The moving average (MA) is trending upwards.
The strategy is not already in a position.
Exit (Long Position):
The market exits the 'squeeze' state, and the closing price is below the moving average, which is not trending upwards.
Alternatively, if the MA starts trending downwards.
A take profit condition is also set, where the position is closed if the price reaches a set percentage above the entry price.
VWMA (Volume Weighted Moving Average):
This is used as an additional indicator for trend analysis but does not directly influence entry or exit conditions.
Components and Calculations
Squeeze Box:
Bollinger Bands are calculated using the standard deviation and a moving average.
Squeeze Percentage compares the current Band Width with the range over a specified period.
VWMA:
A volume-weighted moving average is plotted to provide insights into the trend influenced by volume.
Tips for Best Use
Confirm Trends: Use VWMA to confirm the overall market trend. An upward VWMA can be a good indicator to support long entries.
Risk Management: The take profit and stop-loss parameters should be adjusted according to your risk tolerance.
Watch Squeeze Dynamics: Pay attention to the squeeze dynamics. A squeeze indicates a potential breakout.
Backtesting: Always backtest the strategy with historical data to understand its performance in different market conditions.
Supplementary Indicators: Consider using additional indicators for further confirmation, like RSI or MACD.
Stay Updated: Keep abreast of market news and events, as they can significantly impact market movements and the effectiveness of technical indicators.
Remember, no strategy is foolproof, and it's essential to exercise caution and thorough analysis before making trading decisions.