The fierst Indicator On TradingView: Squeeze Momentum Indicator Strategy (Lazybear)

 hey traders in today's Post we'll be

going over exactly how to use the

squeeze momentum indicator

let's get started to set this indicator

up

go to the top of the screen and click on

the button labeled indicators and

strategies

then on the left click on public library

the squeeze momentum indicator should be

at the very top of the list

but if it's not then you can simply type

in squeeze momentum indicator into the

search bar

above so once you've added this

indicator to your chart it should look

something like this

i'm not a huge fan of the default visual

settings on this indicator

so let's go into the settings and make a

few changes

so simply double click anywhere on the

indicator to bring up the settings

the first half of the settings window

controls the colors for the red and

green bars you see on the indicator

and the second half of the window

controls the colors for the dots you see

in the middle of the indicator

so the first thing i'm going to do is

change the opacity on all the bars to

100

this will make it easier to see them on

your chart

next i'm going to change these crosses

to circles

again this just makes them slightly

easier to see

next i'm going to change the black

circles to dark blue

and i'm going to change the gray circles

to light blue 

and finally i'm going to slightly

increase the thickness of them

all right now we're all set if you

followed along then your squeeze

momentum indicator should look something

like this

the bars on this indicator represent the

amount of momentum in the market

when the bars are green this shows that

there is currently

upwards momentum in the market and when

the bars are red

this shows that there's currently

downwards momentum

the second part of this indicator is the

squeeze itself

which are these dots in the middle now

to fully understand how this part of the

indicator works

we need to understand how markets move

in relation to volatility

when a market is said to be in a period

of low volatility

this simply means that there is a low

amount of movement

in the market if you're looking at a

traditional candlestick chart then the

size of the candles will be smaller than

average

and any price movement you see will be

slower than normal

whereas when a market's in a period of

high volatility

this implies that there is a high amount

of movement in the market

the size of the candles you see will be

larger than average

and the price movement will overall be

faster than normal

this leads us to a very important key

principle

in trading periods of high volatility

are preceded by periods of low

volatility

this happens on all time frames and in

all markets

for example looking at this chart every

single time there was a period of high

volatility

meaning every time there was a period of

fast price movement

it was preceded by a period of low

volatility

where price movement was slow this is

the idea that the squeeze momentum

indicator is built on

the whole point of this indicator is to

allow us to capture these large moves in

the market

by entering during the quieter periods

when the market is in one of these

quieter periods

prior to making the large move then that

market is said to be

in a squeeze this is exactly what the

dots in the middle of the squeeze

momentum indicator represent

when the dots are this dark blue color

this shows that we are currently in a

squeeze

or a period of low volatility and when

the dots change to this light blue color

this is what's called the squeeze

release where volatility has

increased once again so here's how the

strategy works

we're going to wait for a period of time

when we have multiple

dark blue dots in a row showing that we

are in an

extended squeeze next we're going to

wait for the first light blue dot to

appear

after a series of dark blue dots this is

the squeeze release signal

if at this point in time the bar on the

light blue dot is green

then we're going to enter a buy trade if

the bar is red

then we're going to enter a sell trade

we're going to keep this position open

until the bars change to a darker color

and then we're going to close it

that means that if we entered a buy

trade we would wait for a switch from

light green to dark green or if we

entered a sell trade we would wait for a

switch from light red to dark red

here we have a four hour chart of the

aussie dollar

so remember the first step of this

strategy is to wait for a period of time

where we have multiple dark blue dots in

a row

on our squeeze momentum indicator this

shows that we are currently in a squeeze

or a period of low volatility

in this example we have a series of dark

blue dots show up

on the indicator and if you look at the

price chart above

you can see that we are indeed in a

period of low volatility

the next step is to wait for the first

light blue dot to appear

on the indicator which will signal the

squeeze release

we have our first light blue dot appear

here on the indicator

so we're going to look at the color of

the bar on the indicator at that point

in time

and in this case it's a red bar

signaling bearish momentum

so we would enter a sell trade on the

close of this candle

the market starts moving down as bearish

momentum starts to kick in

after entering the trade we would wait

for a change to the darker colored bars

on the indicator before closing our

trade position

in this case we see a change on the

indicator from light red to dark red

here so we would close our trade

position on the corresponding candle

there's a certain thing we can do with

this strategy to greatly increase the

probability of our trades

so let's cover that now here we have a

market that puts in a swing to the

upside

and is now ranging between this level of

support

and this level of resistance at this

point in time we have a bullish bias

which means we're expecting price to

continue higher

by incorporating a market bias into this

strategy

we can filter our trades to only enter

in a certain

direction for example here we have a

series of dark blue dots in a row

followed by a light blue dot normally

this would be seen as a cell signal

but when we have a bullish bias we can

filter out the cell signals this

indicator provides

and only take the buy signals our next

series of dark blue dots come in here

followed by a light blue dot we have a

green bar

showing on the indicator at this point

in time so this would be seen as a buy

signal

so we would enter on the close of this

candle the indicator changes from light

green to dark green shortly after on

this candle

so we would close this trade for a small

loss

the final opportunity comes in here

where we have multiple dark blue dots in

a row

followed by a light blue dot so we would

enter

on the close of this candle price then

begins moving upwards as bullish

momentum

comes into the market eventually we see

a change on the indicator from

light green to dark green right here so

we would use this opportunity to close

our trade position on the corresponding

candle

by incorporating a market bias into our

trading decisions

we can increase the probability of our

trades for example

you may wish to switch over to a higher

time frame chart and determine the

direction of the overall trend

before using this indicator to identify

entry signals

if the market is in an uptrend on the

higher time frame charts then you would

only take the buy signals this indicator

generates on the lower time frames

and if the market is in a downtrend on

the higher time frame charts then you

would only take the sell signals this

indicator generates on the lower time

frame