Forex trading is a complex field that requires a comprehensive understanding of various tools and indicators to make profitable decisions. Among these tools, the MP Squeeze Momentum indicator stands out. It’s a derivative of the TTM Squeeze volatility indicator introduced by John Carter. Its primary function is to capitalize on the price’s tendency to break out strongly following a consolidation within a tight range.

Understanding the Volatility Component

The volatility component of the MP Squeeze Momentum measures price compression using Bollinger Bands and Keltner Channels. When the Bollinger Bands are entirely enclosed within the Keltner Channels, it signifies a period of very low volatility, known as the squeeze. As the Bollinger Bands expand and move back outside the Keltner Channels, the squeeze is said to have released. This change indicates an increase in volatility and the likelihood of prices breaking out of the tight range.

Versions of MP Squeeze Momentum

The MP Squeeze Momentum indicator offers two versions that users can select based on their preference: Histogram and Line Graph.

In the Histogram version, a momentum oscillator shows the expected direction of the move once the squeeze fires. This histogram oscillates around the zero line. An increase in momentum above the zero line signals a potential long position, while momentum falling below the zero line could indicate a shorting opportunity.

The Line Graph version includes a graph of the main indicator instead of a histogram and a second signal line, which is a 5-bars simple moving average of the original line. This version provides visual BUY/SELL signals.

Squeeze On/Off Dots: An Indicator of Volatility

The on/off state of the squeeze is visually represented by small dots on the zero line of the indicator. Yellow dots signify the squeeze is on, indicating low volatility and the market preparing for an explosive move either upwards or downwards. Gray dots represent the “Squeeze release”, signalling an increase in volatility.

Settings of MP Squeeze Momentum

Users can customize the MP Squeeze Momentum indicator according to their trading strategies. The settings include choosing between the Histogram or Line Graph indicator type, setting the Bollinger Bands period and multiplier, adjusting the Keltner Channel period and multiplier, and selecting the Signal line period. Moreover, users can customize the color of the histogram and markers, as well as the color of the main and signal lines.

Using the MP Squeeze Momentum Indicator

In the Histogram version, traders should wait until the first gray dot appears after a yellow dot, then take a position in the momentum’s direction. For example, if the momentum value is above zero, one might consider going long. The position should be exited when there’s a change in momentum, indicated by a color change.

In the Line Graph version, a BUY signal is given when the main blue line crosses ABOVE the red signal line, and a SELL signal is given when the blue line crosses BELOW the red signal line.

FAQ

1. Where can I find independent testing of the MP Squeeze Momentum indicator?
Independent testing of this product is available on the forexroboteasy.com website.

2. Can I subscribe to updates on the testing results of this product?
Yes, you can subscribe to updates on the testing results of this product on the forexroboteasy.com website.

3. Can I share my experience of using the MP Squeeze Momentum indicator?
Absolutely! We encourage users to share their experiences using this product.

4. Is this a sponsored product review?
No, this is an independent product review written in a professional and journalistic tone.

Please note that investing in forex trading involves high risk. Always research thoroughly and seek professional financial advice before making any investment decisions.