Improved Scalping Consolidation & Squeeze Indicator

Overview
This indicator highlights three key market states designed for scalpers and intraday traders:

Consolidation zones (low volatility, neutral momentum)

Volatility squeezes (Bollinger Bands inside Keltner Channels)

Momentum exhaustion (trend weakening signals)

It applies bar coloring to visually map the transition between compression → expansion conditions that often precede breakouts or trend continuations.

How It Works

1. Consolidation Detection

The script identifies compression periods based on:

RSI neutrality (45–55 range)

Low MACD histogram amplitude

Low short-term ROC (rate of change)
These zones represent tightened price action before volatility returns.

2. Squeeze Detection

A squeeze occurs when:

Bollinger Bands contract inside Keltner Channels
This is a classic volatility compression signal and is often used to anticipate breakout conditions.

3. Momentum Exhaustion Detection

Signals when:

RSI is overbought (>70)

MACD histogram begins weakening
This highlights potential fatigue in upward momentum.

Strength Filters (Optional)

You can choose whether signals require:

Single-bar confirmation
or

N-bar consecutive confirmation (configurable)

This allows the script to be used as:

A sensitive, real-time scalping tool

A slower, more selective swing filter

Bar Colors

Orange → Squeeze detected

Yellow → Consolidation zone

White → Momentum exhaustion

Normal candles → No significant condition detected

Priority is applied in this order:
Squeeze → Consolidation → Exhaustion

Use Cases

Anticipating breakouts during low-volatility phases

Mapping structure during ranging markets

Improving scalping entries with volatility filters

Understanding when trending momentum is weakening

Notes

This tool is not a buy/sell indicator by itself. It is a market condition visualizer designed to enhance timing, confirmation, and context when combined with your strategy.