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The Bollinger Band Squeeze occurs when volatility falls to low levels and the Bollinger Bands narrow.
According to John Bollinger, periods of low volatility are often followed by periods of high volatility. Therefore, a volatility contraction or narrowing of the bands can foreshadow a significant advance or decline.
A common way to define a Squeeze is when the Bollinger Band is within the Keltner Channel.

The AT BBSqueeze indicator can be used as a separate panel indicator, but also as a price panel (chart) indicator.
In the first case it will trigger signals as a Non Market Direction Indicator (so strength only), in the second case it will act as a MDI with normal signals.

 

ATBBSqueeze-settings

Alerts

  • Squeeze ON alert
  • Squeeze OFF alert
  • If used in the pricepanel, the same alerts as the AT Bollinger and AT Keltner will also be fired

Signals (overlaying price panel)

When the indicator is shown overlaying the price panel it behaves like a Market Direction Indicator, and generates these signals:

Strong LongWhen the Keltner and Bollinger signals are both Strong Long
Weak LongWhen at least one of the Keltner and Bollinger signals is Weak Long, and the other is not Short
NoneWhen the other conditions aren’t valid
Weak ShortWhen at least one of the Keltner and Bollinger signals is Weak Short, and the other is not Long
Strong ShortWhen the Keltner and Bollinger signals are both Strong Short

Strength Signals (separate panel)

When the indicator is in a separate panel it behaves like a Strength Indicator, and generates these signals:

No Squeeze (1.0)When the squeeze is not active
Strong (0.75)n/a
Squeeze (0.5)When the squeeze is active
Weak (0.25)n/a
Zero (0)n/a
If there’s a squeeze other indicators signals will be halved

Settings

Bollinger NumStdDevThe number of standard deviations for the Bollinger Bands
Bollinger PeriodThe number of bars for the Bollinger Bands to evaluate
Keltner MultipleThe number of standard deviations for the Keltner bands
Keltner PeriodThe number of bars for the Keltner Channel to evaluate
Show BackgroundIf checked the background will be colored during a squeeze
Cloud OpacityThe opacity of the clouds
Bollinger Cloud ColorThe color of the cloud between the Bollinger bands
Keltner Cloud ColorThe color of the cloud for the Keltner Channel
PlotsThe plot styles for Bollinger Bands and Keltner Channel