Bollinger Squeeze

Bollinger bandwidth is best for identifying The Squeeze. This occurs when volatility falls to a very low level, as evidenced by narrowing bands. The upper and lower bands are based on the standard deviation, which is a measure of volatility. Therefore, volatility contracts as the bands narrow. The bands narrow as price flattens or moves within a relatively narrow range. The theory is that periods of low volatility are followed by periods of high volatility. Relatively narrow Bandwidth (a.k.a. the Squeeze) can foreshadow a significant advance or decline. After a Squeeze, a price surge and subsequent band break signal the start of a new move. A new advance starts with a Squeeze and subsequent break above the upper band. A new decline starts with a Squeeze and subsequent break below the lower band.

If you do not like to have many indicators on your charts, the Bollinger Bands Squeeze Histogram is the indicator for you. The Bollinger Bands Squeeze Histogram does a fantastic job of gauging imminent trends.  The indicator keeps things simple and flexible.  You have all the power of band squeeze foreshadowing of big moves in a clean histogram in lower chart.

If you are the experimenting type, Bollinger Bands Squeeze Histogram enables you to work with other moving averages as your Bollinger Band mid-line (SMA, EMA, HMA, TMA, TEMA, WMA).  In addition, it can display an average of the band movement.  You can adjust the parameters to suit your own style.

Plots the Squeeze (or the width of the Bollinger Band) in points. Also plots the moving average of the squeeze.

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Requirements

An FXCM NinjaTrader account is required (including free FXCM demo accounts).

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