Squeeze indicator
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Squeeze indicator Fig A.1 The red bars at the bottom of fig A.1 is the squeeze indicator. It identifies a region of consolidation where the market is building up for a move. The longer, the squeeze is the bigger the move to be expected. FigA.2 Silver 1hr The squeeze is identified when the Bollinger Bands Contract within the keltner bands.
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Squeeze indicator. How it works, how it is used standalone and in conjunction with other indicators.
Transcript of Squeeze indicator
Squeeze indicator Fig A.1
The red bars at the bottom of fig A.1 is the squeeze indicator. It identifies a region of consolidation where the market is building up for a move. The longer, the squeeze is the bigger the move to be expected. FigA.2 Silver 1hr
The squeeze is identified when the Bollinger Bands Contract within the keltner bands.
The lower indicator in fig A.2 is indicative of how far the bollinger bands are within or without the keltner bands. This is displayed for demonstration purposes only, and not used in normal use. The settings for the Keltner and Bollinger Bands, have been derived from extensive testing and are unique for each time frame but common across all markets Keltner Bands are derived from applying the Average True Range to a moving average. Bollinger Bands are derived from applying a standard error to a moving average. FigA.3 Silver Daily
The Squeeze indicator can be used as a warning to be cautious as the market is contracting and can break out in either direction. It should be used with other indicators to determine the direction of the market once a squeeze has ended. When trading the higher timeframe should always be observed to check for a squeeze.
Trading the squeeze with squeeZebox and megatrend
Fig A.4 Silver hourly squeeze
Fig A.5 5min squeeze, squeeZebox and megatrend
In Fig A.4 a squeeze on H1 silver ended at 6am GMT on 8th May 2011 having triggering long from megatrend. 1:45 PM silver 5min went into a squeeZebox setup 2:30 pm squeeZebox triggers long as NYSE opened at $34.79 this also coincided with a squeeze ending and megatrend triggering long. Stops < bottom of squeeZebox at 3436. risk 63 pips 4:20 PM GMT silver goes into a squeeze on 5 min and megatrend triggers to take profits at $35.19 7:40 GMT 5 min squeeze ends 8:15 GMT megatrend triggers long at $35.02 stop < 3472 risk 30 pips 4:15 am GMT megtrend triggers to take profits at $35.59 11:00 am GMT silver H1 goes back into a squeeze. Profits for 1st trade 40 pips Profits for 2nd trade 57 pips Total 97 pips EST = GMT + 5hrs
Fig A.6 Silver weekly
Fig A.7 WTI crude CL_F hourly
Fig A.8 Eur/Usd weekly
Fig A.9 Eur/Usd hourly
