Squeeze Momentum + Signal Layer [SQZMOM_SL]
The Squeeze Momentum + Signal Layer (SQZMOM_SL) indicator combines momentum analysis, volatility compression, breakout confirmation, and optional filters to identify potential bullish and bearish trading setups. Its dashboard displays six essential market metrics.
### Logic of the indicator
1\. Momentum (val)
The indicator calculates momentum using linear regression (`ta.linreg`) applied to the difference between the closing price and a reference level derived from the highest high, lowest low, and average closing price over the Keltner Channel lookback period.
- Positive: `val > 0`, indicating bullish momentum.
- Negative: `val < 0`, indicating bearish momentum.
- Zero: `val == 0`, indicating neither positive nor negative momentum.
2\. Momentum Change
Calculated as the current momentum minus the previous bar's momentum:
`Momentum Change = val − val[1]`
A positive result means momentum is increasing, while a negative result means momentum is decreasing. The value's direction and its change together help assess momentum strength.
3\. Squeeze Status
Bollinger Bands (BB) are compared with Keltner Channels (KC).
- ON: Bollinger Bands are inside Keltner Channels, indicating volatility compression.
- OFF: Bollinger Bands are outside Keltner Channels, indicating the squeeze condition has ended.
- Intermediate: Neither condition is satisfied.
A squeeze release may precede a strong price move, but it does not predict the direction.
4\. Volatility State
Average True Range (ATR) measures price movement magnitude. The dashboard compares current ATR with its moving average:
- High: ATR exceeds its average.
- Low: ATR is below its average.
- Normal: Both are equal.
5\. RVOL
Relative Volume is calculated as current volume divided by average volume over the selected lookback. RVOL above `1.0x` indicates above-average volume; below `1.0x` indicates below-average volume.
6\. ATR
ATR quantifies typical price movement, helping traders understand volatility and evaluate potential stop-loss distances.
### Signal generation
Bullish candidates require rising positive momentum and bullish confirmation from a recent squeeze release or upside breakout. Bearish candidates require falling negative momentum and bearish confirmation. Optional EMA, ADX, and RVOL filters can further restrict signals.
Important: The six dashboard metrics describe market conditions; they do not independently guarantee profitable trades.
### Logic of the indicator
1\. Momentum (val)
The indicator calculates momentum using linear regression (`ta.linreg`) applied to the difference between the closing price and a reference level derived from the highest high, lowest low, and average closing price over the Keltner Channel lookback period.
- Positive: `val > 0`, indicating bullish momentum.
- Negative: `val < 0`, indicating bearish momentum.
- Zero: `val == 0`, indicating neither positive nor negative momentum.
2\. Momentum Change
Calculated as the current momentum minus the previous bar's momentum:
`Momentum Change = val − val[1]`
A positive result means momentum is increasing, while a negative result means momentum is decreasing. The value's direction and its change together help assess momentum strength.
3\. Squeeze Status
Bollinger Bands (BB) are compared with Keltner Channels (KC).
- ON: Bollinger Bands are inside Keltner Channels, indicating volatility compression.
- OFF: Bollinger Bands are outside Keltner Channels, indicating the squeeze condition has ended.
- Intermediate: Neither condition is satisfied.
A squeeze release may precede a strong price move, but it does not predict the direction.
4\. Volatility State
Average True Range (ATR) measures price movement magnitude. The dashboard compares current ATR with its moving average:
- High: ATR exceeds its average.
- Low: ATR is below its average.
- Normal: Both are equal.
5\. RVOL
Relative Volume is calculated as current volume divided by average volume over the selected lookback. RVOL above `1.0x` indicates above-average volume; below `1.0x` indicates below-average volume.
6\. ATR
ATR quantifies typical price movement, helping traders understand volatility and evaluate potential stop-loss distances.
### Signal generation
Bullish candidates require rising positive momentum and bullish confirmation from a recent squeeze release or upside breakout. Bearish candidates require falling negative momentum and bearish confirmation. Optional EMA, ADX, and RVOL filters can further restrict signals.
Important: The six dashboard metrics describe market conditions; they do not independently guarantee profitable trades.
Penafian
Maklumat dan penerbitan adalah tidak bertujuan, dan tidak membentuk, nasihat atau cadangan kewangan, pelaburan, dagangan atau jenis lain yang diberikan atau disahkan oleh TradingView. Baca lebih dalam Terma Penggunaan.
Penafian
Maklumat dan penerbitan adalah tidak bertujuan, dan tidak membentuk, nasihat atau cadangan kewangan, pelaburan, dagangan atau jenis lain yang diberikan atau disahkan oleh TradingView. Baca lebih dalam Terma Penggunaan.