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OA Squeeze Momentum Indicator
Updated
The OA Squeeze Momentum Indicator is a powerful tool designed for traders who seek to identify periods of consolidation and impending volatility in the market. Inspired by other popular Squeeze indicators, this customized version includes enhanced features and distinct color coding to improve clarity and usability.
How It Works
The OA Squeeze Momentum Indicator combines Bollinger Bands (BB) and Keltner Channels (KC) to identify squeeze conditions in the market. The principle behind this indicator is to detect periods when the market is in a tight trading range (squeeze) and to signal potential breakout opportunities.
Components:
1. Bollinger Bands (BB):
- Calculated using a simple moving average (SMA) and standard deviation.
- Bands are set at a default length of 20 periods and a multiplier of 2.0.
2. Keltner Channels (KC):
- Calculated using an exponential moving average (EMA) and average true range (ATR).
- Channels are set at a default length of 20 periods and a multiplier of 1.5.
3. Squeeze Condition:
- Squeeze On: Occurs when the Bollinger Bands are within the Keltner Channels, indicating low volatility and a potential squeeze.
- Squeeze Off: Occurs when the Bollinger Bands expand beyond the Keltner Channels, signaling a possible release of volatility.
4. **Momentum Oscillator:**
- Uses a linear regression of the source price, adjusted by the average of the highest high and lowest low over a specified period.
- Plots a histogram that visually represents momentum, helping to confirm the direction of the potential breakout.
Features
1. Dynamic Color Coding:
- Positive Momentum: Green shades (#2ecc71 for increasing momentum and #039240 for decreasing momentum).
- Negative Momentum: Blue shades (#4b88e0 for increasing momentum and #1a73e8 for decreasing momentum).
- Squeeze Indicators:
- Blue color for no squeeze.
- Black color for squeeze on.
- Gray color for squeeze off.
2. Alerts for Squeeze Release:
- Squeeze Release Up: Triggers an alert when the squeeze condition transitions from on to off, indicating potential upward breakout.
- Squeeze Release Down: Triggers an alert when the squeeze condition transitions from off to on, indicating potential downward breakout.
Usage
Traders can utilize the OA Squeeze Momentum Indicator to identify periods of low volatility (squeeze) and prepare for potential market movements. By observing the momentum histogram and color changes, traders can gain insights into the direction and strength of upcoming price actions. The squeeze release alerts help traders act promptly when volatility re-enters the market.
Happy trading!
Disclaimer: This indicator is a free tool that provides examples of how you can utilize Option Alpha webhooks. Option Alpha does not recommend, suggest, or advise any particular trading strategy or indicator and makes no claim this indicator will provide profitable signals. Past performance is never indicative of future results.
How It Works
The OA Squeeze Momentum Indicator combines Bollinger Bands (BB) and Keltner Channels (KC) to identify squeeze conditions in the market. The principle behind this indicator is to detect periods when the market is in a tight trading range (squeeze) and to signal potential breakout opportunities.
Components:
1. Bollinger Bands (BB):
- Calculated using a simple moving average (SMA) and standard deviation.
- Bands are set at a default length of 20 periods and a multiplier of 2.0.
2. Keltner Channels (KC):
- Calculated using an exponential moving average (EMA) and average true range (ATR).
- Channels are set at a default length of 20 periods and a multiplier of 1.5.
3. Squeeze Condition:
- Squeeze On: Occurs when the Bollinger Bands are within the Keltner Channels, indicating low volatility and a potential squeeze.
- Squeeze Off: Occurs when the Bollinger Bands expand beyond the Keltner Channels, signaling a possible release of volatility.
4. **Momentum Oscillator:**
- Uses a linear regression of the source price, adjusted by the average of the highest high and lowest low over a specified period.
- Plots a histogram that visually represents momentum, helping to confirm the direction of the potential breakout.
Features
1. Dynamic Color Coding:
- Positive Momentum: Green shades (#2ecc71 for increasing momentum and #039240 for decreasing momentum).
- Negative Momentum: Blue shades (#4b88e0 for increasing momentum and #1a73e8 for decreasing momentum).
- Squeeze Indicators:
- Blue color for no squeeze.
- Black color for squeeze on.
- Gray color for squeeze off.
2. Alerts for Squeeze Release:
- Squeeze Release Up: Triggers an alert when the squeeze condition transitions from on to off, indicating potential upward breakout.
- Squeeze Release Down: Triggers an alert when the squeeze condition transitions from off to on, indicating potential downward breakout.
Usage
Traders can utilize the OA Squeeze Momentum Indicator to identify periods of low volatility (squeeze) and prepare for potential market movements. By observing the momentum histogram and color changes, traders can gain insights into the direction and strength of upcoming price actions. The squeeze release alerts help traders act promptly when volatility re-enters the market.
Happy trading!
Disclaimer: This indicator is a free tool that provides examples of how you can utilize Option Alpha webhooks. Option Alpha does not recommend, suggest, or advise any particular trading strategy or indicator and makes no claim this indicator will provide profitable signals. Past performance is never indicative of future results.
Release Notes
Updated to include a signal bar color for when the squeeze changes to Off. Release Notes
Slight name change and updating of post image. Release Notes
Added in a check for the barstate to ensure the alerts didnt double fire or fire before the signal bar fully closed. 
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.