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Eric Johnson

Indicators for Reduced Volatility/squeeze

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Hi, I am new to the forum, but have been working on indicator combinations and trade testing them for years now. I began this project using bollanger band compression/squeezes and trading the price range breakouts that followed. Then I started using John Carters trade the markets squeeze system. I began adding indicators to give more technical perspective on squeeze conditions that would lead to price breakouts on different time frames and paint barring them.

I will share a few that I have been working with, in hopes that others have some ideas. First is the trade the markets squeeze, bollanger 20,2 and keltner 20,2 or 1.5. When the BB enters the keltner channel, a signal is generated. I use Quotetracker, so you know my indicator source.

Next I added a choppiness index 14. It paintbars over 65. Then I have a bollanger bandwith lower indicator set 10,0.5 . It paintbars at less than .005 Of course I have an ADX 14,14 painbarring at less than 15.

Finally I have a new toy that was interesting to me. It acts like a short term trigger for change. It is a market facilitation index set to 5. It is spikey and has 2 operating ranges so the paintbarring is a bit tricky. It is as follows, main less than .0001 set color, and main less than .0007 set (new)color and stop. It can be viewed in both ranges on a multi year MSFT chart. I am observing the effect of the down spikes only.

What would these paintbars look like in useful terms? They occur at times when the market goes into resting. They show up at different intervals, often in combination. I found breakouts particularly powerful when combined with a 50 and 21 EMA crossover. The goal is to observe powerful combinations of paint bars, usually hiding the indicator.

At this stage these are tools for creative development. For a trading system you can check out http://www.tradethemarkets.com or I posted a some details on the BB squeeze indicator thread. Market perspective is profitable.

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Welcome to the forum.

 

You may want to read 'Bollinger on Bollinger Bands' first:

http://books.google.com/books?hl=en&id=FLlxAz85iysC&dq=Bollinger+on+Bollinger&printsec=frontcover&source=web&ots=hP5CNNuXhD&sig=yU2RtMlZ6JHIqwZraY2qtY1iMnI&sa=X&oi=book_result&resnum=6&ct=result

 

FYI, JC is not the originator of the 'Squeeze' other than renaming it. It was nickm001 and eKam who coded it in 07/18/2003 00:49:52 as Indicator Name: NickMBigMove and NickMNxtMov on the Tradestation forum

https://www.tradestation.com/Discussions/Topic.aspx?Topic_ID=14439

(requires forum access).

 

JC merely ______ it. Replace blank with approriated, stole, commercialized, profited, absconed ....

 

Most traders are awared of the 'Squeeze indicator' and there is no need to start multiple threads on them, and links to the commercialized versions may be inappropriate as some may mistake the action as spamming the forum.

 

Blue-Ray is the resident Tradestation EasyLanguage expert on this forum and he has graciously coded many open source indicators here, some of which included the squeeze: http://www.traderslaboratory.com/forums/f46/various-indicators-squeeze-2fastmas-etc-3688.html

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Thanks for the links and ideas. I originally duplicated a version of the TTM squeeze using this forum, and the free videos on the TTM site. They were making daily forecasts that were of use, so I wanted something very close to what they were using. Also the trading method was evident after viewing a few videos.

Sharing my work with beginners and people of skill and creativity, keeps me motivated. I use Quote tracker because it is a free download with decent tools, unlike when I was battling with trade station quirks. The idea is a low overhead platform, with decent display, has allowed me to freely share more. It is not code programmable by user, so the fine code available, I could not use. I do find it a quality platform otherwise.

I agree this thread should not be a TTM re-run. It is about what can be added to the BB squeeze to make it more powerful? More specifically what triggers trending expanding volatility?

A quick note to TS users, when I said " paint bars", in Quote tracker (QT) colors can be placed in zones on the upper or lower indicators, not just on price bars.

For me it is about working on complex levels to some up with something simple and useable. If the tool can be shared and benefit many, all the better.

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