Features of the Squeeze Index Indicator
The Squeeze Index Indicator for MT4 and MT5 is designed to help traders identify potential breakout areas after periods of limited price movement. It measures price compression as a percentage, allowing traders to spot areas where the market might break out.
What the Squeeze Index Measures
The primary function of the Squeeze Index is to quantify how tightly price is moving within a restricted range. Higher values indicate intensified compression, signaling potential breakout opportunities. Note that the indicator does not predict breakout direction but highlights areas of range contraction.
Technical Foundation and Calculation
The indicator uses the concept of damping, where price oscillations reduce over time, forming upper and lower boundaries. The squeeze level is determined by the distance between these boundaries, normalized using a correlation oscillator to provide a value between 0% and 100%.
Installation and Usage
- Download the Squeeze Index Indicator file.
- Open the MetaTrader platform and navigate to File > Open Data Folder.
- Place the downloaded file in the MQL4/Indicators or MQL5/Indicators folder.
- Restart MetaTrader and apply the Squeeze Index Indicator to your chart.
Use the indicator to monitor price compression and prepare for potential breakouts. While it does not provide direct buy/sell signals, combining it with other technical tools can enhance trading strategies.
Customization Options
Traders can adjust parameters such as the convergence factor, length, and input source to tailor the indicator to their trading strategy. Proper settings can help identify compression zones, though aggressive settings might introduce false positives during retracements.