Bollinger BandWidth Squeeze Breakout

Bollinger BandWidth Squeeze Breakout

Description:

This indicator merges classic Bollinger BandWidth (BBW) with TTM Squeeze Pro-style compression dots. It identifies volatility contractions, very effective at identifying chop or ranging markets, and color-codes the BBW line based on directional breakout bias—helping traders anticipate explosive moves before they happen.

It supports multi-level squeeze detection:

• High Compression (Orange): Tightest squeeze — highly coiled setup
  
• Medium Compression (Red): Moderate squeeze — building pressure
  
• Low Compression (Black): Light squeeze — early contraction
  
• (No dot means no squeeze – free expansion)
  

How It Works

Bollinger BandWidth (BBW):

Calculated as the percent width between Bollinger Bands over a selected moving average (SMA, EMA, etc.). A rising BBW suggests volatility expansion; falling BBW indicates compression.

Directional Bias (BBW Color):

The line is colored green when recent bars show upside breakout pressure, red when downside pressure dominates, and gray when neutral. This is based on cumulative position of price relative to the Bollinger Bands.

TTM Squeeze Pro Dots:

Compression dots plotted on the zero line represent volatility squeeze levels, using up to 3 Keltner Channel thresholds:

• Orange Dot: High compression (tightest squeeze zone)
  
• Red Dot: Medium compression
  
• Black Dot: Low compression
  
• (No dot means no squeeze — price is expanding)
  

Expansion & Contraction Context:

Plots historical highest/lowest BBW values (user-defined period) to help spot extreme conditions.

How to Interpret:

Use squeeze dots to identify when the market is “chop/ranging.” Breakouts from these zones often come with sharp moves.

BBW Line Color = Bias Filter:

• Green → Bullish expansion pressure
  
• Red → Bearish expansion pressure
  
• Gray → Neutral or undecided
  

Use this to filter direction before entering a breakout or momentum trade.

Inputs:

Length: Period for BB and Keltner calculations

MA Type: Choose from SMA, EMA, SMMA, WMA, VWMA, or None

StdDev: Standard deviation for BB

Expansion/Contraction Lengths: Historical window to track BBW extremes

Source: Input source for all calculations (default: Close)

Keltner Multipliers: Customize thresholds for high/mid/low compression

Best For:

• Traders looking to anticipate breakout direction
  
• Scalpers and swing traders seeking early volatility cues
  
• Anyone using BB or TTM Squeeze logic in their setups
  

Pro Tips:

• Combine with momentum tools (e.g., RSI, MACD, SMI, CCI) to confirm breakout thrust
  
• Use squeeze dot color shifts (red/orange → no dot) as a breakout timing tool
  
• Use historical BBW highs/lows as context for relative volatility expansion