BB Bollinger Bands Squeeze
December 24, 2008
Definition:
Known as the BB Squeeze Indicator, its concept is based on capturing breakout moves by using the Bollinger Bands outside the Keltner Channels.
Whenever the Bollinger Bands fall inside the Keltner Channels the indicator will fire a signal. This signal is represented by a red dot on the lower pane.
When the Bollinger Bands breakout of the Keltner Channels the indicator fires a squeeze indicated by a green dot on the lower pane.
Interpretation:
The trading signal is taken when the green dot appears after the red dot in the direction of momentum. Momentum is plotted as a histogram. If the momentum is blue (up) on a squeeze, this is a long signal. If the momentum is red (down) on a squeeze, this is a short signal.
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