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DCA Volatility Squeeze indicator is a combination of the Donchian channel and ATR indicator. The Donchian channel is a range indicator. It shows the price range over a specific period. ATR is a volatility-based indicator.
When the range is high and the price is within the range, and if volatility is high, it indicates a very volatile market. When the range trends upward or downward and the volatility is relatively low, the trend is strong.
When the DCA indicator is rising, it indicates that the trend is strong compared to the volatility during the period. It shows strong momentum. A DCA indicator below its average line indicates a bearish trend. You can also define ATR multiplier in this indicator to adjust the volatility.
The indicator table value in TradePoint & RZone also provides you with a list of all values of this indicator for any group of stocks. This will allow you to compare the readings of this indicator across different stocks.
The indicator is applicable to all types of charting. Calculated based on the number of columns on P&F charts, bricks on Renko charts, lines on Line-break charts, candles on Heikin ashi charts, and lines on Kagi charts. While the formula and reading of the indicators remain the same, they become more dynamic on these charts.
This indicator is also available in the System Builder of RZone & TradePoint for all charting methods. Using the system builder, you can develop various strategies based on the different conditions already present in this indicator. Additionally, it can be used with other indicators or price patterns to develop effective trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.