Squeeze Confluence Momentum Breakout

Family: breakout · Regime: trending · Complexity: medium · Asset classes: Equities, Crypto, Forex · Timeframes: H1, H4, D1

Thesis

Market volatility is mean-reverting; long periods of price compression (Squeeze) lead to violent expansions. By filtering these expansions with Relative Vigor (conviction) and a price floor, we enter high-probability trends that are exited only when a multi-layer technical confluence (IAE) confirms structural exhaustion.

Components

• Squeeze Break (John Carter) (regime) — Defines the transition from low-volatility consolidation to high-volatility expansion; provides the momentum bias via histogram color/direction.
• Relative Vigor Index (RVI) (direction) — Confirms direction by ensuring the closing price is consistently in the upper half of the recent range, indicating strong buying conviction.
• Plotshape Test Indicator (entry) — Acts as a hardcoded price-filter baseline, ensuring the asset has sufficient nominal value for liquidity purposes (Close > 2).
• IAE — Technical Confluence Score (exit) — Aggregates 10 distinct technical layers to identify when the trend has reached exhaustion (low confluence score).
• ATR SL Finder (risk) — Provides dynamic, volatility-adjusted stop-loss levels to account for the price expansion characteristic of squeeze breakouts.

Known failure conditions

• Price drops and sustains levels below 2.0 (invalidates Entry component logic).
• IAE score remains high (above 60) while price moves against the position, indicating a failure in the confluence exit logic.
• Persistent 'Squeeze' state for > 50 bars, indicating a dead/illiquid market.

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