Squeeze Momentum

This indicator is an adaptation of John Carter's "TTM Squeeze" volatility indicator, described in chapter 11 of his book Mastering the Trade. Unlike Carter's original method, which uses a simple momentum indicator, this version applies a linear regression-based approach to plot the histogram.

Blue zones on the midline signal that the market has entered a "squeeze" phase, where the Bollinger Bands are contained within the Keltner Channels. This indicates low volatility and suggests that the market is preparing for a substantial move in either direction. Gray zones mark the "squeeze release".

Carter advises waiting for the start of the gray zone following the blue zone to open a position in the direction of the momentum. For example, if the momentum value is positive, a long position is recommended. Positions should be closed when momentum reverses, as shown by a change in the histogram's color.

To enhance entry timing and reduce missed opportunities, some traders suggest incorporating additional indicators like ADX or WaveTrend into the analysis.