Phoenix Squeeze

Identify price explosions in a flash with this awesome NinjaTrader squeeze indicator

What is the NinjaTrader TTM squeeze indicator?

There have been dozens of squeeze indicators on the market, all inspired by the legendary indicator named "TTM Squeeze". This NinjaTrader momentum indicator takes advantage of the characteristics of Bollinger Bands and Keltner Channel in a really smart way.

While Keltner Channel is rather stable, Bollinger Bands is elastic due to the nature of Standard Deviation. Therefore, whenever Bollinger Bands contracts and goes completely inside Keltner Channel, the market is said to be in a squeeze – which is usually a signal of a choppy or uncertain market condition.

Then when Bollinger Bands expands and travels outside Keltner Channel, the market leaves the squeeze and often enters an "explosion" phase, because a period of low volatility often leads to a period of high volatility (trending in either way).

Our version, Phoenix Squeeze, uses a metaphor that the phoenix is locked in a squeeze when the market has low volatility. Then the phoenix will majestically fly (either up or down) when the market explodes with increasing volatility.

The Squeeze plot created by this awesome NinjaTrader TTM squeeze indicator is hard-coded at zero and only displays the information through its color: red or orange for in-squeeze periods, and green or darkgreen for out-of-squeeze periods. As you see, the Squeeze plot identified by our NinjaTrader 8 squeeze momentum indicator is colorized in 4 user-defined colors (instead of only 2 colors as in most versions out there) to show how strong the contraction and expansion is.

The Squeeze plot does not tell the direction of explosion, so here comes the duty of the Momentum plot which is calculated from a complex combination of the Close price, the moving average of Close, the Donchian channel midline, and the smoothing of the final result in the end. A positive momentum indicates a bullish trend, while a negative momentum indicates a bearish trend. Combining the Momentum plot information with what's provided by the Squeeze plot, you can come up with a comprehensive interpretation of the market price action.

What makes Phoenix Squeeze stand out?

Just like any other remakes we have done, we added a whole lot of enhancements to level up this legendary NinjaTrader TTM squeeze indicator. Some of our most important enhancements include:

• Safe explosion period: Phoenix Squeeze lets you define how many bars after a squeeze you can rely on for an explosion. The default setting is 8 bars, which is recommended by the original author. The indicator then paints chart background & colorizes bars in special colors to highlight this special period.
• Contraction & expansion ratios: Our robust squeeze indicator for NinjaTrader 8 lets you define the strong contraction & expansion ratios, where the ratio is equal to the width of Bollinger Bands divided by the width of Keltner Channel. With this feature: strong contraction can be highlighted in red, weak contraction is in orange, weak expansion is green; strong expansion is darkgreen. The Squeeze plot will be color-coded that way to help you intuitively recognize the intensity of contraction/expansion.
• Slowdown signals: In a trending phase, whenever there is a decrease of momentum, a slowdown signal will be printed to alert you to the possibility of trend weakness.
• Full of options: You can build Bollinger Bands with 11 popular moving averages, and can even smooth the midline further. You can build Keltner Channel with our special ninZaATR and 11 MA types, which is independent from the Bollinger Bands. The momentum can also be constructed with any of 11 MA types. Therefore, you can mix & match the settings to find the best configuration for your instrument and timeframe.

How to use it?

Important instructions on the settings: Depending on the timeframe and instrument you trade, you need to tweak this NinjaTrader TTM squeeze indicator for adaptation. You just need to focus on these important settings:

• Bollinger offset (Standard Deviation): Decrease the Bollinger offset to have more in-squeeze periods, and increase the Bollinger offset to have fewer. A good configuration should produce the balance between in-squeeze periods and out-of-squeeze periods.
• Thresholds of momentum: You will need to increase/decrease Threshold Upper & Threshold Lower to match well with your timeframe and instrument. Too small thresholds may bring noises, while too large thresholds will cause a delay of signals.

In this indicator, ninZaATR is used (instead of regular ATR) for better performance. For your information, ninZaATR is ninZa.co's special ATR version that helps improve indicator performance significantly on intraday charts. It is also a standalone FREE indicator for ninZaFamily → https://ninza.co/product/ninzaatr.

If you'd like to see what's available, browse our complete collection of indicators for futures trading on NT8.