7trade Squeeze Momentum: market compression and momentum
Squeeze is a panel below the chart. It shows two things: whether the market is compressed (the price moves narrower than usual) and where and how strongly the price has moved away from the middle of its recent range. After this article you will understand the fill, the dots, the bars and the marks, the three views, the events for strategies and all the settings. How to turn the indicator on is covered in "7trade bot: introduction".
Why it is useful
The market calms down and comes alive in turns. In a lull the closes move in a narrow range, and the outcome of a short trade is decided by a random swing. Squeeze marks the lull with a fill and shows the bar where it ended, together with the side of the momentum.
The indicator is adapted for binary options:
- bar height in moves per trade — a bar of height one means the price moved away from the middle by as much as it usually travels during your trade;
- typical-move dotted line — a bar beyond the dotted line has moved farther than usual;
- compression fill and exit marks — the lull is visible as a band, and its end as a mark with a side.
Below is a live chart on real candles. Click it to open it large; there a click on the fill, a mark or the dotted line shows an explanation. The ⚙ icon opens the settings window.
What is on the panel
Compression
The indicator compares two widths: the Bollinger Bands (the spread of closes) and the Keltner Channel (the typical range of bars). Bands inside the channel mean the closes move narrower than the typical range: the market is compressed.
| Element | Meaning |
|---|---|
| Grey fill | The market is compressed. The longer the fill, the longer the lull |
| below the zero line | Exit from compression: compression ended on this bar, and the bar is above zero |
| above the zero line | Exit from compression: compression ended, and the bar is below zero |
| Dots on the zero line | The same state as a dot on every bar: "compressed", "no compression" or in between. In between happens only when the band and channel periods differ |
Momentum
The histogram bars show how far the close has moved from the middle of its recent range, smoothed.
| Bar colour | Meaning |
|---|---|
| Bright green | Above zero and higher than the previous one: the price is moving up, and the distance is growing |
| Muted green | Above zero but lower than the previous one: the distance is shrinking. This is not a reversal down yet |
| Bright red | Below zero and lower than the previous one: the price is moving down, and the distance is growing |
| Muted red | Below zero but higher than the previous one: the distance is shrinking |
| Element | Meaning |
|---|---|
| Zero line | The side border: above — the price is above the middle of its range, below — below |
| Typical-move dotted line | Plus and minus one typical close move during a trade. A bar beyond the dotted line means the price moved farther than usual |
The bar colour changes at a local peak of the histogram — usually one to three candles before the bars cross zero.
Hints
Click the fill, a mark or the dotted line to see a plate: what it is and what to do with it. The plate stays until you click elsewhere. Under the line are the compression length, the momentum side and the typical move per trade in words. To make the plate appear on a mouse hover too, turn on "Explanations on hover" in the "View" section — it is off at the start.
Three views
The "View" switch in the section of the same name.
| View | What you see |
|---|---|
| Per trade | Momentum in moves per trade, compression as a fill, the exit from compression as a mark. This is the starting setup |
| In points | Momentum in price points, compression as dots on the zero line. No fill, marks or dotted line |
| All | The fill, the dots, the exit marks and the typical-move dotted line at once |
Events for strategies
In the "Strategies" window the events are listed with the prefix "Squeeze:".
| Event | When it fires | CALL / PUT |
|---|---|---|
| market compressed | State: the grey fill | None |
| no compression | State: the bands are wider than the channel. As a confirmation it allows entry only when there is no lull | None |
| compression started | The bar where the fill begins | None |
| compression ended | The bar where the fill ends. The side is taken from the histogram or another indicator | None |
| exit from compression with the momentum side | The same end of compression with a side — the or mark | Bar above zero / below zero |
| momentum relative to zero | State: the bars are above or below zero | Above / below |
| momentum crossed zero | The bars crossed zero | Up / down |
| histogram bar colour | State: the bar is higher than the previous one (green) or lower (red) | Green / red |
| bar changed colour | The bar turned green or red on this bar | Turned green / turned red |
| momentum fading | State: a muted bar — moving towards zero | None |
| momentum strengthening | State: a bright bar — moving away from zero | Above zero and rising / below zero and falling |
"Compression started" has no direction, so the "invert" checkbox does not apply to it. To avoid entering during a lull, use "no compression" as a confirmation.
All settings
The window opens with the ⚙ icon — on the Squeeze card in the "Indicators" window or in the panel header. While a strategy with Squeeze is running, the panel uses that strategy's settings, not the window's.
View
| Field | What it does |
|---|---|
| View | "Per trade", "In points" or "All" |
| Explanations on click | A click on the fill, a mark or the dotted line shows what it is |
| Explanations on hover | The same explanations without a click. Off at the start |
| Add the state to the plate | The compression length, the momentum side and the typical move per trade |
| Expiry, bars | Trade time in chart bars. The typical move is calculated from it: the scale, the dotted line and the captions |
| Typical-move window, bars | Over how many recent bars the typical move per trade is calculated |
The presets are here too:
| Preset | What it sets |
|---|---|
| 1-min trade | The scale and the dotted line in moves over one bar |
| 3-min trade | Over three bars — the starting setup |
| 5-min trade | Over five bars: the move per trade is larger, and the same bars become lower |
Compression
| Field | What it does |
|---|---|
| Compression fill | The grey fill |
| Compression exit marks | and at the zero line |
| Dots on the zero line | State dots |
| Bollinger Bands period | The window of the bands' average and spread, 20 at the start |
| Keltner Channel period | The window of the channel's average, its width and the momentum window, 20 at the start |
| Bollinger Bands multiplier | The band width, 2 at the start. More — wider bands, rarer compression |
| Keltner Channel multiplier | The channel width, 1.5 at the start. More — a wider channel, more frequent compression |
| Channel width by true range | Take into account the gap from the previous close. Untick it and the bar range is simply from low to high |
Momentum
| Field | What it does |
|---|---|
| Histogram | The momentum bars |
| Typical-move dotted line | The dotted line at plus and minus one typical move |
| Zero line | The zero line |
Legend
All panel colours in one list; each can be changed. Here is also the button that returns all settings to the starting ones.
What Squeeze does not do
- It does not know the future. The end of compression means the lull is over, not that the price will go the way of the momentum.
- It does not enter trades by itself. Trades are opened by a strategy from the "Strategies" window.
- It does not choose a side from compression. Compression and its end have no direction — the side comes from the momentum or another indicator.
- It does not look at volume. Both widths are calculated from candles. Volume on the platform means ticks (how many times the price changed during the candle), not the volume of trades.
Frequently asked questions
What does a muted bar mean? The distance from the middle is shrinking. The move is weakening, but it is not a reversal yet.
Why did the bar colour change while zero was not crossed? The colour compares a bar with the previous one, not with zero. So it changes before the zero cross.
Why is there no fill in the "In points" view? This view shows momentum in price points and compression only as dots on the zero line.
How do I avoid entering during a lull? Add the "no compression" confirmation to the strategy rule.
What's next
- Cipher B — another panel below the chart: waves and the agreement strip.
- Line Break — lines that ignore small swings.
- Strategies — the builder — how to build a rule from events.