This indicator, designed for use on the main price chart, is a powerful tool for identifying periods of market compression (squeeze) and potential breakout conditions. It utilizes advanced calculations to provide visual cues and trend indications to traders.
Key Features:
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Squeeze Indicator Line:
- The script plots a line on the main price chart that changes color based on specific conditions. This line helps traders identify when the market is in a compressed state (squeeze) or when it is more relaxed.
- Red Line: Indicates the market is in a squeeze condition.
- Blue Line: Indicates the market is not in a squeeze condition.
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Alert Signals:
- Red Dots Above Bars: The script plots red circles above the bars when the market is in a squeeze condition. These visual alerts make it easy for traders to spot potential breakout opportunities.
- (Note: There is also provision in the script for blue circles to indicate when the market exits the squeeze condition, but this feature is currently commented out.)
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Trend Indication with Linear Regression:
- Green Line: A green line representing the linear regression value is plotted on the main price chart. This line provides an indication of the overall trend direction, helping traders to identify and follow market trends.
- Green Crosses: Additional green crosses are plotted at each bar to emphasize the linear regression value, enhancing its visibility and making it easier to track trend changes.
Customization Options:
- The script includes several input parameters that allow traders to customize the length of the calculation periods, the scaling factors, and the alert thresholds. This flexibility ensures that the indicator can be tailored to suit different trading styles and preferences.
This indicator provides a comprehensive view of market conditions, helping traders to identify key moments of potential volatility and trend changes. By visually highlighting periods of market compression and providing clear trend signals, it aids in making informed trading decisions. The red dots serve as a crucial visual cue, indicating when the market is in a squeeze condition, thus alerting traders to potential breakout opportunities