The MACD Squeeze Oscillator is a powerful tool for traders, reminiscent of the Trade The Markets Squeeze, but it’s built around the MACD framework.
This indicator’s fundamental concept is to trade only when the Bollinger Bands are nestled within the Keltner Bands, effectively creating trading zones.
You'll see the indicator displayed as a MACD histogram with signal labels along the center line, and it comes with nine customizable parameters:
- MACD Fast EMA period - sets the fast EMA period for MACD calculations;
- MACD Slow EMA period - determines the slow EMA period for MACD;
- Bollinger Bands period - defines the period for Bollinger Bands;
- Bollinger Bands deviation - adjusts the deviation for Bollinger Bands;
- Bollinger Bands MA method - selects the calculation method for Bollinger Bands;
- Keltner period - sets the period for Keltner Bands;
- Keltner deviation - defines the deviation for Keltner Bands;
- Keltner ATR period - selects the ATR period for Keltner Bands;
- Keltner MA method - determines the calculation method for Keltner Bands.
Interpretation: When the signal labels change color, it indicates that a trading zone has been identified. At this point, you can execute trades based on the MACD output, directional indicators, moving averages, or price crossings within the Bollinger Bands or MA.
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