Squeeze Momentum inverted on four-hour bars
45 Squeeze Momentum settings backtested on USD/JPY across 2025 and 2024. Four-hour bars fell from 27 profitable settings to 5, and 15-minute was its best.
Squeeze Momentum detects a "squeeze" — Bollinger Bands contracting inside the Keltner Channel — and takes the direction the market expands in when that squeeze releases. Contraction, then expansion.
I tested three parameters across 45 combinations on USD/JPY through the whole of 2025, on three timeframes, then ran the same 45 on 2024.
Four-hour bars inverted: 27 of 45 settings profitable in 2024, 5 in 2025. Rank correlation −0.485.
By timeframe
| Timeframe | Profitable 2025 | 2025 median | Profitable 2024 | 2024 median | Both years | Rank corr. | Trades a year |
|---|---|---|---|---|---|---|---|
| 15-minute | 35 / 45 | +338 pips | 41 / 45 | +529 pips | 32 / 45 | +0.372 | ~346 |
| 1-hour | 30 / 45 | +190 pips | 37 / 45 | +814 pips | 25 / 45 | +0.128 | ~78 |
| 4-hour | 5 / 45 | −461 pips | 27 / 45 | +250 pips | 2 / 45 | −0.485 | ~20 |
Across this series most indicators broke down on 15-minute bars and steadied on hourly. Squeeze Momentum is the exception: 15-minute was its best timeframe.
The trade count is why. Waiting for a squeeze to release produces few signals to begin with — 78 a year on hourly, about 20 on four-hour. The problem here is too few trades, not too many.
Even on 15-minute bars it takes about 346 trades a year, a quarter of what the other indicators produce there. Light on cost, with enough sample to read.
Inside the hourly results
| Setting | 2025 | 2024 |
|---|---|---|
| Default 20/2/1.5 | 97 trades, 47.42% win, PF 1.177, +374.3 pips (18th of 45) | +1,585.7 pips (15th) |
| Best of 2025, 10/2/1 | 202 trades, 46.04% win, PF 1.248, +1,354.3 pips | +1,676.5 pips |
| Best of 2024, 14/2.5/2 | −23.5 pips | +2,508.5 pips |
The 2025 winner, 10/2/1, also made money in 2024 — one of the few settings in this series to lead one year and stay clearly positive in the other. The 2024 winner landed on zero the next year.
The default is positive in both, but its +374.3 pips in 2025 sits nearly 1,000 pips behind the top of the table.
What happened on four-hour bars
| 4-hour | 2025 | 2024 |
|---|---|---|
| Default 20/2/1.5 | 23 trades, 17.39% win, PF 0.290, −967.3 pips (34th of 45) | +101.4 pips (26th) |
| Best of 2025, 20/2.5/1.5 | 11 trades, 54.55% win, PF 2.507, +295.5 pips | −188.9 pips (41st) |
| Best of 2024, 10/1.5/1.5 | −1,373.3 pips (40th) | 62 trades, +1,853.0 pips |
| Worst of 2025, 30/1.5/2 | −2,397.9 pips | −66.3 pips |
The default took 23 trades at a 17.39% win rate in 2025 — four winners out of 23, which is all that number says.
And the best four-hour setting of 2025 took 11 trades. A profit factor of 2.507 restates six wins out of eleven; the following year it returned −188.9 pips at 41st.
Four-hour settings trade 0 to 77 times a year, and 8 of the 45 never traded at all. Two of 45 were profitable in both years.
What the two multipliers do
The three parameters do not do the same kind of work.
- Period — feeds the momentum calculation. It sets the value
- Bollinger multiplier and Keltner multiplier — used only to detect the squeeze. They do not change the momentum value
So the multipliers decide when a trade happens and the period decides which way. Tightening them (wider Bollinger, narrower Keltner) makes the squeeze harder to satisfy and cuts the signal count.
On hourly bars in 2025 the trade count ranged from 0 to 289 — tighten too far and 3 of the 45 settings never trade in a year.
About the win rate
The median across the 45 hourly settings in 2025 was 41.5%, and win rate correlates +0.509 with net pips — high for this series.
On four-hour bars, even limiting to settings with at least 10 trades, win rates scatter from 16.67% to 54.55% and the correlation falls to +0.094. At 20 trades a year the win rate is not a stable number.
Adding it to a chart
| Platform | How to add it |
|---|---|
| MT4 / MT5 | Not included. Download an .ex4 or .mq4 into MQL4/Indicators (MQL5/Indicators on MT5), restart |
| TradingView | In the indicator list as "Squeeze Momentum" |
| Browser (Formiq) | In the indicator list, with the period and both band multipliers adjustable |
How this was measured
| Item | Value |
|---|---|
| Pair | USD/JPY |
| Period | 2025-01-01 to 2025-12-31 (2024 run identically for comparison) |
| Timeframes | 15-minute / 1-hour / 4-hour |
| Bars tested | 6,226 hourly bars in 2025; 24,903 on 15-minute, 1,610 on 4-hour |
| Buy | On the bar the squeeze releases, if momentum is positive |
| Sell | On the bar the squeeze releases, if momentum is negative |
| Exit | When momentum crosses zero against the position — no stop, no target, no time exit |
| Costs | 0.3 pip spread, zero slippage, 0.1 lot |
| Combinations | 5 periods (10–40) × 3 Bollinger multipliers (1.5, 2, 2.5) × 3 Keltner multipliers (1, 1.5, 2) = 45 |
| Method | Executed in Formiq's backtester; pips recomputed from each trade's fill prices |
What this test supports
- The one indicator here that preferred 15-minute bars. 32 of 45 profitable in both years, against the rest of this series breaking down there
- Because it signals rarely. About 346 trades a year on 15-minute — a quarter of what the others produce — so the spread stays affordable
- Four-hour does not work. 2 of 45 profitable in both years, rank correlation −0.485, 8 settings never trading, and 2025's winner running on 11 trades
- The default 20/2/1.5 is safe but not strong. 18th and 15th on hourly, nearly 1,000 pips behind the top
- The multipliers are a frequency control. Momentum depends on the period alone; the multipliers only gate when a signal is allowed
The same method applied to OsMA, Accelerator Oscillator, Stoch RSI, STC, WaveTrend, QQE, Aroon, RVI, Supertrend, Williams %R and MFI.
Limits of this test
- One pair, two years
- Squeeze Momentum implementations differ (how the momentum regression is taken, which midline it uses). These figures come from Formiq's
- Entries are restricted to the bar a squeeze releases on; momentum turns during a squeeze are not taken
- Entries and exits both fill at bar closes
- The spread is modelled as a flat 0.3 pips
- Four-hour settings trade 0 to 77 times a year and 8 of 45 never trade. Win rates and profit factors at that count are wide numbers
- Volatility varies by hour of the day
Questions people ask
- What are the best Squeeze Momentum settings?
- On hourly bars in 2025 the best was 10/2/1 (202 trades, +1,354.3 pips), which also made +1,676.5 pips in 2024. The 2024 leader, 14/2.5/2, returned −23.5 pips in 2025. The default 20/2/1.5 made +374.3 pips in 2025 (18th of 45) and +1,585.7 in 2024 (15th).
- Which timeframe suits Squeeze Momentum?
- 15-minute and hourly: 32 of 45 settings profitable in both years on 15-minute and 25 of 45 on hourly, against 2 of 45 on four-hour. Four-hour settings trade between 0 and 77 times a year, and 8 of the 45 never traded at all.
- How is Squeeze Momentum used?
- A squeeze is Bollinger Bands sitting inside the Keltner Channel. This test entered on the bar the squeeze released, in the direction momentum pointed. The two band multipliers only affect the squeeze detection — the momentum value itself depends on the period alone.
- What win rate does it produce?
- The median across the 45 hourly settings in 2025 was 41.5%, and win rate correlates +0.509 with net pips — high for this series. On four-hour bars, even restricting to settings with at least 10 trades, win rates run from 16.67% to 54.55%.
- Is Squeeze Momentum built into MetaTrader?
- No, neither MT4 nor MT5 includes it. You download an .ex4 or .mq4 into MQL4/Indicators (MQL5/Indicators on MT5) and restart. TradingView lists it as "Squeeze Momentum". Formiq's charts include it with the period and both band multipliers adjustable.
Formiq is a free browser-based FX terminal with replay practice and no-code backtesting. Open the chart or see what the free plan includes.