The Squeeze

Note, we are using MT4 tools in this strategy. I provide them. It is important that tools from other platforms are not uploaded. Please!!!

We know that the nature of the instruments moves in trends, abrupted by ranges, then another trend and a range and so on. In this strategy we want to trade the trends from the very beginning. One of the best tools to show the state of an instrument is the Bollinger Band – BB. When bands are widening, we are in a trend and narrowing we are heading toward a range. This narrowing is also called the Squeeze.

So, theory says that when we break out from the Squeeze, then we have a trend. One problem with BB is, that it is difficult to spot the Squeeze because of the lively curves. An often used method is to combine BB with the Keltner Channel – KC. When BB moves inside the KC, then we definitely have a Squeeze. And when BB again moves out of the KC, then the next trend is likely to start. This is the core of this strategy.

The indicator RFSqueeze – coded by me – will show the Squeeze on the charts and it can alert on screen and phone when Squeeze start and end. I am a batch trader, and this strategy honors this method. However, it can be used at only one or a few instruments too.

Select the instrument
First thing is how to select the instrument to trade. I select it on H4 and trade it on M15. My choice – you might do different. So, I have all the instruments that I trade on one MT4 instance. For me that is a lot of charts and too many to have them open, so they are all downfolded. They are all at the H4 timeframe. When the RFSqueeze indicator sends a message “Squeeze started”, then I am alert. When the RFSqueeze indicator sends a message “Squeeze ended”, then I open the chart and analyze the situation. First thing is to watch the daily. If the daily shows a nice trend, then you are ready to go.

Go to M15
You have selected the instrument. Now wait for the RFSqueeze to show the message “Squeeze ended” on M15. There you have your trade. Be ready to trade in the direction on H4 trend. Note there will very often be a false break out in the other direction. Do not trade it. Wait for the instrument to fall back into the range and break out in the other direction. I use M15 because I then have enough bars to trade during the day.
At the end of every 4-hour bar (you are still at M15), go to H4 and judge the situation. Is the instrument still worth trading. If not let the chart remain on the H4 ready to catch the next squeeze.
So now you have at your MT4 instance a number of charts awaiting the H4 squeeze signal and a number of charts on the M15 which you are trading using the squeeze signal. These M15 charts shall be opened and visible.

Edit: I think mayby I will use M5. At least I will be testing it.

Entry and Exit
I use EMA 8 and 21 on HTF and the trading TF to assure that I am on the right trend. I will test using the M30 or H1 also.
At least H4 may not be in a squeeze. I will test if it is better to have no squeeze on TF's between trading TF and H4 at all. It will give fewer but better trades I believe.
I have a spread filter, but cannot use it on my demoaccounts. They have a hugh spread which makes it difficult to trade M5 and M1. So I will take some unneccesary losses in the demo test.
More filters will come along this testing.

I enter at "squeeze end" signal from the indicator. SL at the center BB. RRW 1:1. On M5 RRW can be larger.

Thats it for now, But guys - give your input. Let's find some more filters.

If you are not a full-time trader
Well, trade the Daily TF. Put squeeze indicator on weekly and monthly.

The tools and template
I will not upload a template. Make your own in few seconds. If you cannot, then you will not be able to trade safely anyway.

Tools:
RFSqueeze.
EMA 8 and EMA 21.
SqueezeBBK_mtf_1 (Multi timeframe Squeeze indicator) Will be uploaded later on.

There is an error in RFSqueezeTF_1. It is misleading.
Do not use it. An update will come.

Examples
Here is a cherry picked example. The yellow dots is the Squeeze tool.

Very nice, looking forward to this!

A classic! Subscribed. Curious to see how you approach this...

Nice, we will wait patiently...

This is how I think the strategy.

1) You receive a signal on H4 about Squeeze ended. Red arrow.

2) You check Daily and find it is trending.

3) You go to M15 and trade any Squeeze signals that appears. Only in the H4 direction to avoid fake signals. Blue arrows.

This is M5:

My batch ready for action this monday morning.

Hello RiskFighter,
The indicator RFSqueeze is an updated version or the last one you posted on your threads ?
Thanks in advance!

thank you for sharing the system
i am new here
can you share the squeez indicator please ???
and it's based on what ??
and what is the other indicator in the below window ??

Dear Riskfighter, thanks for your untiring contribution and support for this community. Please kindly favour us with the indicators and template. Do not be tired of us

I will share tools today or tomorrow.

This is not updated. Just the latest one.

Thanks

So I will upload everything I use today. First the Squeeze indicator.

It works at the principle about a squeeze is present when the Bollinger channel is inside the Keltner channel. There are no guarantee, that all ranging conditions are covered using this method, but I find it usefull.

My indi draws the Bollinger Bands and the Keltner Bands. This can be shut off in the parameters. But try to have it on in the beginning, so that you can see how it works. I normally does not have the Keltner channel drawn. Note: The indi does not draw the Bollinger Centerline.

The parameter settings that I use:


To use your Iphone, you must get the MetaTrader4 App. It is free.
Insert your trading account in it. Then go too Tools/Options/Notifications on your PC. Enable notifications. The MetaQuotes Id is found at your App. In settings click on "Chat and Messages". Now the Id is at the very button of the screen. Push Test to check if you got it right.

The colour settings that I use:

The colours 0 and 1 are the Bollinger Bands.
The colours 2 and 3 are the Keltner Bands.
The colours 4 and 7 are the squeezes.

NOTE!!! When you have an alert indicator present, then if you change timeframe forth and back, you will have the same alert every time the squeeze is met, no matter that you had the alert right before. That cannot be changed.

NOTE also: Going from say H4 to M5, the indicator suddently does not show on M5 chart. Then go to M1 and back to M5 and it will appear. That is a MetaTrader problem. It is out of my hands. Nothing to do about it.

thanks for sharing the indicator
I added it to the chart but I don't see the green/red arrow like yours (
Where did I go wrong

Those I made manually to show where to take a trade. The indicator does not make arrows. It is easy to see when the squeeze has ended - no more yellow dots, so arrows are not needed.

Thanks for sharing. Can you share your themplate with the othrts 2 indicators at the bottom?

i am looking forward to a video explaining how to enter orders, entry - SL - TP from you
thank you very much

Entry when squeeze stops and you have a nice size of the bar in the direction of the H4 trend.
SL on BB centerline.
RRW - your choice. This night I used 1:1. I like winning. My stummock you know!
I risked 1% of the account per trade. Normally to much for my nerves, but this was demo testing a robot and I was not watching it trading.
The blue indicator in top of the screen is my multi timeframe squeeze indicator. Does anybody want that??

The small amount on US500 was due to an experiment.

Sorry, I have not been present the whole latest week and will be a lot away this week to. Private matters.

[quote=RiskFighter;15419695]The colours 0 and 1 are the Bollinger Bands. The colours 2 and 3 are the Keltner Bands. The colours 4 and 7 are the squeezes.
Please, what represent colours 5 and 6 ?

[quote=catafx;15430478] It should say 4 to 7.