Esco Pressure Cooker
# Esco Theory | Pressure Cooker
Pressure Cooker is a volatility compression and expansion indicator built to identify periods of tightening price action and track what happens when price breaks out of those ranges.
Markets move through periods of contraction and expansion. This indicator measures that contraction, tracks the range price is consolidating within, and evaluates the resulting breakout.
Instead of a simple squeeze on/off condition, Pressure Cooker uses a compression index to measure how tight current market conditions are relative to recent history.
## Compression Index
The compression index ranges from 0 to 100 and combines four measurements:
- **Normalized ATR (30%):** Measures current volatility relative to its recent history.
- **Bollinger Band Width (30%):** Measures how tightly the bands have contracted.
- **Squeeze Depth (25%):** Measures how far the Bollinger Bands have contracted inside the Keltner Channels.
- **Compression Duration (15%):** Accounts for how long compressed conditions have persisted.
The default lookback is 200 bars. Weights and thresholds are fully adjustable.
Higher readings indicate stronger relative compression, not the probability or direction of a breakout.
## Compression and Expansion
Pressure Cooker tracks several phases:
**Compression:** Volatility contracts enough to meet the initial threshold.
**Building:** Compression strengthens and persists.
**Expansion:** Price closes outside the established range by a minimum ATR distance.
**Confirmed:** Price extends beyond the breakout or maintains consecutive closes outside the range.
**Failed:** Price closes back inside the range during the confirmation window.
**Expired:** The breakout does not meet confirmation or failure conditions within the allotted window.
**Fizzled:** Compression ends without a qualifying breakout.
The compression range is established before the breakout candle and remains fixed during expansion evaluation.
## Breakout Quality
Each expansion receives a quality score based on:
- Displacement relative to ATR
- Candle body relative to its total range
- Relative trading volume
The score evaluates the breakout candle itself. It does not predict whether the move will continue.
## Chart Features
- Bollinger Bands with optional compression highlighting
- Optional Keltner Channels
- Historical compression range boxes
- Breakout and outcome markers
- Compression index dashboard
- Adjustable thresholds, colors, and display settings
- Optional diagnostic breakdown
- Configurable alerts
Keltner Channel width can use median true range to reduce the influence of isolated volatility spikes, or traditional ATR.
## Alerts and Repainting
State transitions, markers, and alerts are calculated on confirmed candle closes.
The dashboard can display developing conditions separately from confirmed readings.
Alerts are available for compression, building pressure, bullish and bearish expansion, confirmation, failure, expiration, and fizzled compression.
## Notes
Pressure Cooker requires sufficient historical data to establish its relative volatility measurements. Default settings are intended primarily for 1H and 4H charts.
Readings are relative to the individual symbol and timeframe. A compression index of 80 on BTC is not directly comparable to a reading of 80 on a low-liquidity altcoin.
Volume measurements depend on the exchange and available market data.
This indicator is intended for market analysis and education. It does not generate trade recommendations or predict future price movement.
**Esco | Brypto**
*We don't predict. We trade.*
Pressure Cooker is a volatility compression and expansion indicator built to identify periods of tightening price action and track what happens when price breaks out of those ranges.
Markets move through periods of contraction and expansion. This indicator measures that contraction, tracks the range price is consolidating within, and evaluates the resulting breakout.
Instead of a simple squeeze on/off condition, Pressure Cooker uses a compression index to measure how tight current market conditions are relative to recent history.
## Compression Index
The compression index ranges from 0 to 100 and combines four measurements:
- **Normalized ATR (30%):** Measures current volatility relative to its recent history.
- **Bollinger Band Width (30%):** Measures how tightly the bands have contracted.
- **Squeeze Depth (25%):** Measures how far the Bollinger Bands have contracted inside the Keltner Channels.
- **Compression Duration (15%):** Accounts for how long compressed conditions have persisted.
The default lookback is 200 bars. Weights and thresholds are fully adjustable.
Higher readings indicate stronger relative compression, not the probability or direction of a breakout.
## Compression and Expansion
Pressure Cooker tracks several phases:
**Compression:** Volatility contracts enough to meet the initial threshold.
**Building:** Compression strengthens and persists.
**Expansion:** Price closes outside the established range by a minimum ATR distance.
**Confirmed:** Price extends beyond the breakout or maintains consecutive closes outside the range.
**Failed:** Price closes back inside the range during the confirmation window.
**Expired:** The breakout does not meet confirmation or failure conditions within the allotted window.
**Fizzled:** Compression ends without a qualifying breakout.
The compression range is established before the breakout candle and remains fixed during expansion evaluation.
## Breakout Quality
Each expansion receives a quality score based on:
- Displacement relative to ATR
- Candle body relative to its total range
- Relative trading volume
The score evaluates the breakout candle itself. It does not predict whether the move will continue.
## Chart Features
- Bollinger Bands with optional compression highlighting
- Optional Keltner Channels
- Historical compression range boxes
- Breakout and outcome markers
- Compression index dashboard
- Adjustable thresholds, colors, and display settings
- Optional diagnostic breakdown
- Configurable alerts
Keltner Channel width can use median true range to reduce the influence of isolated volatility spikes, or traditional ATR.
## Alerts and Repainting
State transitions, markers, and alerts are calculated on confirmed candle closes.
The dashboard can display developing conditions separately from confirmed readings.
Alerts are available for compression, building pressure, bullish and bearish expansion, confirmation, failure, expiration, and fizzled compression.
## Notes
Pressure Cooker requires sufficient historical data to establish its relative volatility measurements. Default settings are intended primarily for 1H and 4H charts.
Readings are relative to the individual symbol and timeframe. A compression index of 80 on BTC is not directly comparable to a reading of 80 on a low-liquidity altcoin.
Volume measurements depend on the exchange and available market data.
This indicator is intended for market analysis and education. It does not generate trade recommendations or predict future price movement.
**Esco | Brypto**
*We don't predict. We trade.*
Clause de non-responsabilité
Les informations et publications ne sont pas destinées à être, et ne constituent pas, des conseils ou recommandations financiers, d'investissement, de trading ou autres fournis ou approuvés par TradingView. Pour en savoir plus, consultez les Conditions d'utilisation.
Clause de non-responsabilité
Les informations et publications ne sont pas destinées à être, et ne constituent pas, des conseils ou recommandations financiers, d'investissement, de trading ou autres fournis ou approuvés par TradingView. Pour en savoir plus, consultez les Conditions d'utilisation.