bbsqueeze_dark_001
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This script is designed to analyze market trends by identifying specific price movements and "squeezes"—periods where market volatility becomes unusually low, often preceding a significant breakout. It combines statistical trend analysis with volatility measurements to provide visual cues on the chart.
Core Logic Overview
The tool operates using three primary logical components:
1. Trend Direction & Momentum Tracking The script calculates a specialized "Linear Regression" value. Unlike a simple moving average, this looks at the relationship between the high and low prices of past candles relative to their closing prices.
- It identifies whether the current trend is moving upward or downward.
- It monitors the velocity of these movements. If the momentum is increasing (getting stronger) or decreasing (weakening), it categorizes these changes into different visual "bins." This allows a user to see not just where the price is going, but whether the strength of that move is currently accelerating or decelerating.
2. Volatility and the "Squeeze" Detection A major feature of this script is its ability to detect a "squeeze." It does this by comparing two different types of market variance:
- It measures the current Standard Deviation (the typical spread of price action).
- It measures the Average True Range (ATR), which represents recent volatility.
- By dividing these values against a specific factor, the script calculates a "Bollinger Squeeze" value. When this value falls below a certain threshold, it indicates that the market is becoming abnormally quiet or compressed.
3. Visual Signals The script translates the data above into three distinct types of visual information:
- Histograms: These show the current trend direction and the strength/momentum of that trend. They change style depending on whether the price action is gaining or losing steam.
- Breakout Alerts: When the "Squeeze" logic detects that volatility has reached an extreme low point, the script generates specific icons (arrows). These act as a warning that the market is "coiled" and may be about to explode in one direction or another shortly.
Summary for the User
In plain terms, this tool acts as a filter for noise. It looks for moments where the market is moving with a clear direction but very little "shaking" (volatility). By highlighting these periods of compression and showing the momentum behind the trend, it helps traders identify potential high-impact moves before they fully unfold.
Indicators Used
Miscellaneous
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bbsqueeze_dark_001
//+------------------------------------------------------------------+
//| bbsqueeze.mq4 |
//| Copyright © 2005, Nick Bilak, beluck[AT]gmail.com |
//| enhanced a little bit by CJ Rivas, carlos[AT]vealo.com |
//+------------------------------------------------------------------+
#property copyright "Copyright © 2005, Nick Bilak"
#property link "http://metatrader.50webs.com/"
#property indicator_separate_window
#property indicator_buffers 6
#property indicator_color1 Blue
#property indicator_color2 Red
#property indicator_color3 DarkBlue
#property indicator_color4 Maroon
#property indicator_color5 Blue
#property indicator_color6 Lime
//---- input parameters
extern int bolPrd=20;
extern double bolDev=2.0;
extern int keltPrd=20;
extern double keltFactor=1.5;
extern int momPrd=12;
//---- buffers
double upB[];
double upB2[];
double loB[];
double loB2[];
double upK[];
double loK[];
int i,j,slippage=3;
double breakpoint=0.0;
double ema=0.0;
int peakf=0;
int peaks=0;
int valleyf=0;
int valleys=0, limit=0;
double ccis[61],ccif[61];
double delta=0;
double ugol=0;
//+------------------------------------------------------------------+
//| Custom indicator initialization function |
//+------------------------------------------------------------------+
int init()
{
//---- indicators
SetIndexStyle(0,DRAW_HISTOGRAM,EMPTY,3);
SetIndexBuffer(0,upB);
SetIndexEmptyValue(0,EMPTY_VALUE);
SetIndexStyle(1,DRAW_HISTOGRAM,EMPTY,3);
SetIndexBuffer(1,loB);
SetIndexEmptyValue(1,EMPTY_VALUE);
SetIndexStyle(4,DRAW_ARROW,EMPTY,2);
SetIndexBuffer(4,upK);
SetIndexEmptyValue(4,EMPTY_VALUE);
SetIndexArrow(4,159);
SetIndexStyle(5,DRAW_ARROW,EMPTY,2);
SetIndexBuffer(5,loK);
SetIndexEmptyValue(5,EMPTY_VALUE);
SetIndexArrow(5,159);
SetIndexStyle(2,DRAW_HISTOGRAM,EMPTY,3);
SetIndexEmptyValue(2,EMPTY_VALUE);
SetIndexBuffer(2,upB2);
SetIndexStyle(3,DRAW_HISTOGRAM,EMPTY,3);
SetIndexEmptyValue(3,EMPTY_VALUE);
SetIndexBuffer(3,loB2);
//----
return(0);
}
//+------------------------------------------------------------------+
//| Custor indicator deinitialization function |
//+------------------------------------------------------------------+
int deinit()
{
//----
//----
return(0);
}
//+------------------------------------------------------------------+
//| Custom indicator iteration function |
//+------------------------------------------------------------------+
int start()
{
int counted_bars=IndicatorCounted();
int shift,limit;
double diff,d,dPrev, std,bbs;
if (counted_bars<0) return(-1);
if (counted_bars>0) counted_bars--;
limit=Bars-31;
if(counted_bars>=31) limit=Bars-counted_bars-1;
for (shift=limit;shift>=0;shift--) {
//d=iMomentum(NULL,0,momPrd,PRICE_CLOSE,shift);
d=LinearRegressionValue(bolPrd,shift);
dPrev=LinearRegressionValue(bolPrd,shift+1);
if(d>0) {
if ((dPrev>0) && (dPrev > d)){ upB2[shift]=d; upB[shift] = 0; } else { upB[shift]= d; upB2[shift] = 0; }
//upB[shift]=0;
loB[shift]=0;
loB2[shift]=0;
} else {
if ((dPrev<0) && (dPrev < d)){ loB2[shift]=d; loB[shift] = 0; } else { loB[shift]= d; loB2[shift] = 0; }
upB[shift]=0;
upB2[shift]=0;
//loB[shift]=d;
}
diff = iATR(NULL,0,keltPrd,shift)*keltFactor;
std = iStdDev(NULL,0,bolPrd,MODE_SMA,0,PRICE_CLOSE,shift);
bbs = bolDev * std / diff;
if(bbs<1) {
upK[shift]=0;
loK[shift]=EMPTY_VALUE;
} else {
loK[shift]=0;
upK[shift]=EMPTY_VALUE;
}
}
return(0);
}
//+------------------------------------------------------------------+
double LinearRegressionValue(int Len,int shift) {
double SumBars = 0;
double SumSqrBars = 0;
double SumY = 0;
double Sum1 = 0;
double Sum2 = 0;
double Slope = 0;
SumBars = Len * (Len-1) * 0.5;
SumSqrBars = (Len - 1) * Len * (2 * Len - 1)/6;
for (int x=0; x<=Len-1;x++) {
double HH = Low[x+shift];
double LL = High[x+shift];
for (int y=x; y<=(x+Len)-1; y++) {
HH = MathMax(HH, High[y+shift]);
LL = MathMin(LL, Low[y+shift]);
}
Sum1 += x* (Close[x+shift]-((HH+LL)/2 + iMA(NULL,0,Len,0,MODE_EMA,PRICE_CLOSE,x+shift))/2);
SumY += (Close[x+shift]-((HH+LL)/2 + iMA(NULL,0,Len,0,MODE_EMA,PRICE_CLOSE,x+shift))/2);
}
Sum2 = SumBars * SumY;
double Num1 = Len * Sum1 - Sum2;
double Num2 = SumBars * SumBars-Len * SumSqrBars;
if (Num2 != 0.0) {
Slope = Num1/Num2;
} else {
Slope = 0;
}
double Intercept = (SumY - Slope*SumBars) /Len;
double LinearRegValue = Intercept+Slope * (Len - 1);
return (LinearRegValue);
}
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