Momentum Ignition
Detects periods of price compression (narrowing Bollinger Bands or Keltner Channels) followed by volume-confirmed expansion. Ideal for catching the start of strong directional moves.
What is this scanner?
The Momentum Ignition scanner detects the critical transition from price compression to directional expansion. It monitors Bollinger Band width and Keltner Channel width simultaneously, waiting for both to reach historical lows — a state that precedes explosive moves.
When compression reaches extreme levels and volume surges above the 20-period average, the scanner fires. This identifies the exact moment a coiled spring releases, catching the start of moves that often produce 5-20% returns in a single leg.
Origin & History
Compression-to-expansion trading has roots in John Bollinger's original work on Bollinger Band squeezes in the 1980s. The concept was refined by John Carter in his "Mastering the Trade" book, which introduced the TTM Squeeze — combining Bollinger Bands with Keltner Channels to identify the tightest compressions.
The QSA implementation adds volume confirmation and multi-timeframe validation, filtering out the many false squeezes that plague basic implementations. The volume requirement alone eliminates roughly 60% of false signals.
Detection Criteria
Bollinger Band Width
BB width drops below the 20th percentile of its 120-period range, indicating extreme compression relative to recent volatility.
Keltner Channel Squeeze
Bollinger Bands contract inside the Keltner Channel — the classic squeeze indicator showing volatility has compressed below normal ATR-based ranges.
Volume Surge
Current volume exceeds the 20-period SMA by at least 1.5x on the breakout candle. This confirms institutional participation, not just noise.
Directional Break
Price closes above (LONG) or below (SHORT) the compression range with a full candle body, not just a wick.
Grading Breakdown
Textbook squeeze with 2x+ volume, regime confirmation, and 3+ timeframes agreeing on direction. These are rare but explosive.
Clean squeeze with above-average volume and at least 2 supporting factors (regime, bias, or cross-scanner confluence).
Valid squeeze detected but volume is only marginally above average, or the regime is not ideal for breakout strategies.
Compression is present but the breakout is weak — small body, below-average volume, or conflicting timeframe signals.
Common Mistakes
Entering during the squeeze instead of waiting for the breakout. The squeeze can persist for dozens of candles before resolving.
Ignoring volume on the breakout candle. A squeeze that breaks on low volume is far more likely to be a false breakout.
Trading momentum ignition during CHAOS regime. When the entire market is volatile, individual squeezes lose their predictive edge.
Setting stops too tight inside the compression range. The initial breakout often retests the range before continuing.
How to Trade
Entry Context
Wait for the breakout candle to close above the compression range with above-average volume. Enter on the close or on a small pullback to the breakout level. Never front-run the squeeze.
Risk Management
Place stops below the compression range low (for longs) or above the range high (for shorts). Risk should be 1-2% of portfolio. If the price re-enters the compression range, the thesis is invalidated.
Target Framework
First target: 1x the height of the compression range projected from breakout. Second target: 2x the range. Trail stops using the 10-period EMA on the breakout timeframe after reaching the first target.
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