Squeeze Break indicator: oscillator on the Bollinger Bands and Keltner channel

Squeeze Break indicator - is an oscillator which is based on the strategy proposed in John Carter's book "Mastering the Trade". The main idea of the strategy is that markets tend to move from periods with low volatility to periods with high volatility and vice versa. The strategy aims to track the movement from low volatility to high volatility.

The Squeeze Break indicator uses readings Bollinger Bands and the Keltner channel. The Momentum indicator is also used to make trades.

Using the Squeeze Break indicator in trading

• The positive green histogram means that the Bollinger Bands are outside the Keltner Channel, and the market is slightly inclined to form a trend or rise volatility. The stronger this histogram, the stronger the directional price movement.
• A negative red histogram means that the Bollinger Bands are inside the Keltner channel and the market is more likely to consolidate. The stronger the red histogram, the smaller the price movement.
• Momentum is built into the indicator. According to Carter's strategy, long positions are opened when the Bollinger Bands break outside the Keltner channel and Momentum is above the zero line. A short position is opened when the Momentum indicator goes below zero.
• Additional information has also been added - it is shown in the upper left corner and gives extended information about the current state of the market.
• The indicator beeps when a potential breakout is approaching.

According to the experts of fortrader.org, the Squeeze Break indicator will give more accurate signals on higher timeframes.

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