Squeeze Momentum Indicator [LazyBear] by LazyBear

TradingView

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lazybear custom indicators volatility oscillator

Fixed a typo in the code where BB multiplier was stuck at 1.5. Thanks @ucsgears for bringing it to my notice.

Updated source:

Use the updated source instead of the what TV shows below.

This is a derivative of John Carter's "TTM Squeeze" volatility indicator, as discussed in his book "Mastering the Trade" (chapter 11).

Black crosses on the midline show that the market just entered a squeeze ( Bollinger Bands are with in Keltner Channel). This signifies low volatility , market preparing itself for an explosive move (up or down). Gray crosses signify "Squeeze release".

Mr.Carter suggests waiting till the first gray after a black cross, and taking a position in the direction of the momentum (for ex., if momentum value is above zero, go long). Exit the position when the momentum changes (increase or decrease --- signified by a color change). My (limited) experience with this shows, an additional indicator like ADX / WaveTrend, is needed to not miss good entry points. Also, Mr.Carter uses simple momentum indicator , while I have used a different method (linreg based) to plot the histogram.

More info:
- Book: Mastering The Trade by John F Carter
- Using Squeeze with ADX:

List of all my indicators:

//
// @author LazyBear 
// List of all my indicators: https://www.tradingview.com/v/4IneGo8h/
//
study(shorttitle = "SQZMOM_LB", title="Squeeze Momentum Indicator [LazyBear]", overlay=false)

length = input(20, title="BB Length")
mult = input(2.0,title="BB MultFactor")
lengthKC=input(20, title="KC Length")
multKC = input(1.5, title="KC MultFactor")

useTrueRange = input(true, title="Use TrueRange (KC)", type=bool)

// Calculate BB
source = close
basis = sma(source, length)
dev = multKC * stdev(source, length)
upperBB = basis + dev
lowerBB = basis - dev

// Calculate KC
ma = sma(source, lengthKC)
range = useTrueRange ? tr : (high - low)
rangema = sma(range, lengthKC)
upperKC = ma + rangema * multKC
lowerKC = ma - rangema * multKC

sqzOn  = (lowerBB > lowerKC) and (upperBB < upperKC)
sqzOff = (lowerBB < lowerKC) and (upperBB > upperKC)
noSqz  = (sqzOn == false) and (sqzOff == false)

val = linreg(source  -  avg(avg(highest(high, lengthKC), lowest(low, lengthKC)),sma(close,lengthKC)), 
            lengthKC,0)

bcolor = iff( val > 0, 
            iff( val > nz(val[1]), lime, green),
            iff( val < nz(val[1]), red, maroon))
scolor = noSqz ? blue : sqzOn ? black : gray 
plot(val, color=bcolor, style=histogram, linewidth=4)
plot(0, color=scolor, style=cross, linewidth=2)

Rebounds

about BTCUSD 2

about BABA 1

WELL DONE.

Looks nice.
There is a bug on line 30 of the code when I try to copy it for Tradingview.

Very good works applying the system from Mr John Carter. However as mentioned by you, I also experienced missed good entry points and max TP points. Thanks god I get a best entry using my own system while applying this but do some adjustment (i.e. KC multipliers to 2.0) as I'm scalping and want to get in and out (FIFO) faster.

Tanks

Should line 17 use "mult" instead of "multKC"? Thank you for sharing this indicator!!

Could you please test this strategy
Thanks

study("Squeeze Momentum Indicator"),c=close,l=20,h=high,w=low
v=linreg(c-avg(avg(highest(h,l),lowest(w,20)),sma(c,l)),20,0)
plot(v,color=change(v)>=0?blue:red,style=area)//+593939796676

Excellent indicator, here the version with the auto divergence detection, regular and hidden:

domenicosilletti

@domenicosilletti, WELL DONE.