Liquidity Trend & Squeeze Radar

The Liquidity Trend & Squeeze Radar is a comprehensive trading system designed to visualize the three most critical components of price action: Trend, Volatility, and Momentum. The core philosophy of this tool is to identify periods of market "compression" (low volatility), where energy builds up, and then signal when that energy is released (expansion) for a potential breakout trade. It combines an EMA Cloud for trend direction with a TTM-style Squeeze indicator and a linear regression momentum filter.

Key Components

Trend Cloud (Structure) This component identifies the overall market bias. It uses a Fast EMA and a Slow EMA to create a shaded "Cloud."

Uptrend: The Fast EMA is above the Slow EMA. The Cloud is shaded green (default).

Downtrend: The Fast EMA is below the Slow EMA. The Cloud is shaded red (default).

Usage: Generally, traders should look to take Long signals only when the Trend Cloud is bullish and Short signals when the Trend Cloud is bearish.

Volatility Radar (The Squeeze) This logic detects when the market enters a period of low volatility. It calculates this by comparing Bollinger Bands (Expansion) against Keltner Channels (Average Range).

Squeeze Active: When the Bollinger Bands narrow and go inside the Keltner Channels, a "Squeeze" is active. This is represented by gray dots plotted along the Fast EMA and gray-colored price candles.

Usage: Do not trade during a Squeeze. This indicates indecision and chop. Treat this as a "Wait" signal while potential energy builds.

Momentum Filter (Hidden Logic) While the Squeeze is active, the script calculates the underlying momentum using Linear Regression. This predicts the likely direction of the breakout before it happens. This data is displayed in the Dashboard.

Breakout Signals (Fire) When the Squeeze condition ends (volatility expands), the script checks the Momentum filter.

Bullish Breakout: If the Squeeze ends and Momentum is positive, a triangle pointing up is plotted below the bar.

Bearish Breakout: If the Squeeze ends and Momentum is negative, a triangle pointing down is plotted above the bar.

Status Dashboard A table located in the top-right corner provides a real-time summary of the market state without needing to interpret the chart visuals manually. It lists the current Trend direction, Volatility state (Squeeze vs. Expansion), and Momentum value (Positive vs. Negative).

How to Trade This Indicator

Step 1: Identify the Trend Observe the background Cloud. Ensure you are trading in the direction of the dominant flow. If the Cloud is green, favor Longs. If red, favor Shorts.

Step 2: Wait for the Squeeze Look for the gray dots to appear on the moving average line and for the candles to turn gray. This indicates the market is resting and building energy. During this phase, you are stalking the trade. Avoid entering positions while the gray dots remain visible.

Step 3: The Breakout (The Trigger) Wait for the gray dots to disappear. This means the Squeeze has "Fired."

Long Entry: Look for a Triangle Up signal. Ideally, this should occur when the Trend Cloud is green.

Short Entry: Look for a Triangle Down signal. Ideally, this should occur when the Trend Cloud is red.

Step 4: Confirmation Check the Dashboard table. High-probability trades occur when all three metrics align (e.g., Trend is BULL, Volatility is EXPANSION, and Momentum is POSITIVE).

Settings Guide

Trend Structure:

Fast/Slow EMA Length: Adjusts the sensitivity of the Trend Cloud. Higher numbers effectively smooth out noise but react slower to trend changes.

Show Trend Cloud: Toggles the shaded area between EMAs on or off.

Volatility Radar:

Bollinger/Keltner Settings: These define the Squeeze sensitivity.

Keltner Mult: The most important setting. The default is 1.5. Lowering this to 1.0 will make the Squeeze harder to trigger (requiring extreme compression), leading to fewer but potentially more explosive signals.

Momentum:

Momentum Length: The lookback period for the linear regression calculation used to determine breakout direction.

Visuals:

Colorize Candles: Paints the price bars based on the current state (Gray for Squeeze, Green/Red for Trend).

Show Dashboard: Toggles the visibility of the data table.

Disclaimer This indicator and guide are for educational and informational purposes only. They do not constitute financial, investment, or trading advice. Trading in financial markets involves a significant risk of loss and is not suitable for every investor. Past performance of any trading system or methodology is not necessarily indicative of future results. The user assumes all responsibility for any trades made using this tool. Always use proper risk management.