Combining MACD with a Bollinger–Keltner Volatility Squeeze

Summary

This document describes a ProRealTime adaptation of a MACD indicator combined with a volatility squeeze based on the TTM Squeeze concept. The MACD uses fast and slow exponential averages and a signal average; histogram colors distinguish whether the MACD is above or below zero and whether it is rising or falling. For the squeeze, Bollinger Bands are compared with a Keltner Channel: the relative band positions determine whether volatility is compressed or expanding. The indicator marks low volatility in gray and increased volatility in purple.

The document supplies implementation code and a qualitative description, but no market examples, backtest, or evidence that the color changes predict profitable moves. Some expressions in the provided adaptation appear incomplete or inconsistent, including the calculation of the squeeze value and the True Range choice. These issues mean the code should be checked and validated in the target platform before use; the indicator alone does not define entry, exit, or risk rules.

Key ideas

• The indicator overlays MACD momentum information with a volatility squeeze concept.
• It compares Bollinger Bands with a Keltner Channel to classify volatility conditions.
• Histogram colors also encode MACD direction and its position relative to zero.
• The document provides code but no performance evidence or complete trading rules.
• Several implementation expressions appear inconsistent and require platform-specific validation.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.