Place a buy when the first green dot appears, and histogram bars make a cross above the line.Watch out for a cross of the histogram bars over the zero axis in an upward or downward direction.Look out for a trigger of the squeeze by the appearance of red dots on the zero axis.Launch your TTM Squeeze indicator and adjust the parameter to suit your timeframe.Since you get a squeeze signal from the zero line dots (hence red and green dots), the TTM squeeze zero line crossover provides another confirmation to enter a trade.Ĭonsider the following steps when using the Zero Crossover strategy to trade the TTM Squeeze indicator. The logic is to find where the histogram bars cross the zero line after a squeeze fires and place a buy or a sell trade as required. The Zero Crossover strategy is one way to trade the TTM Squeeze indicator. How to Use The TTM Squeeze Indicator in Trading?ĭifferent strategies have been developed for trading the TTM Squeeze indicator. Ultimately, that is the trading signal provided by the TTM squeeze indicator – Once you notice a red dot or a series of red dots on the zero line followed by a green dot and a rise in the TTM squeeze histogram bar values above the zero line, a trade signal is given. Then, as soon as a substantial change in volatility occurs, the Bollinger band breaks out of the channel, and the asset’s price is likely to spike up. The TTM denotes this period as red dots on the zero line. In essence, the Bollinger band moves right within the Keltner channel when there is low volatility in the market. The market’s price volatility is analyzed using two other indicators: the Bollinger bands and the Keltner channel. So, how does the TTM squeeze work? Well, basically, the TTM squeeze indicator measures both volatility and momentum to identify trading opportunities where changes in these market attributes occur. Many traders particularly use the TTM squeeze indicator to identify a scenario of short-squeeze, which occurs when an asset is heavily shorted, followed by a sharp increase in price when market participants buy the asset at the bottom.įor those who are keen to learn about this phenomenon, we suggest reading about the infamous GameStop stock short-squeeze story. It can be used as another indicator to find areas where the price might reverse.Ī key point to remember is that since the TTM squeeze indicator combines three different tools – Bollinger Bands, Keltner Channels, and Momentum Oscillators – it is considered among the most effective trading tools and indicators. On the other hand, a green dot or a series of green dots implies that the market is not in a squeeze condition, and the existing trend is likely to continue.Īdditionally, the histogram bar (usually displayed in dark blue) presents the momentum around a central axis, the zero line. Once a green dot appears following a series of red dots, a scenario of firing a squeeze is about to happen, and the price is likely to rise sharply. When there’s a squeeze condition in the market, a red dot is displayed (or a series of red dots), and a breakout is likely to occur. Technically, the TTM Squeeze indicator is a sub-chart indicator with red and green dots appearing along the zero line. When using the TTM Squeeze indicator, the trick is to know when a market begins to trend following a period at which the market stays inside a range-bound region. The TTM Squeeze momentum indicator helps traders identify levels where price action starts to race upward or downward, breaking out of a previously held sideways movement. TTM Squeeze Indicator Trading Strategy Tutorial.How to Use The TTM Squeeze Indicator in Trading?.How Does the TTM Squeeze Indicator Work?.Study(shorttitle = "SQZMOM_LB", title="Squeeze Momentum Indicator ", overlay=false) Book: Mastering The Trade by John F Carter Also, Mr.Carter uses simple momentum indicator, while I have used a different method (linreg based) to plot the histogram. My (limited) experience with this shows, an additional indicator like ADX / WaveTrend, is needed to not miss good entry points. Exit the position when the momentum changes (increase or decrease - signified by a color change). Mr.Carter suggests waiting till the first gray after a black cross, and taking a position in the direction of the momentum (for ex., if momentum value is above zero, go long). This signifies low volatility, market preparing itself for an explosive move (up or down). This is a derivative of John Carter's "TTM Squeeze" volatility indicator, as discussed in his book "Mastering the Trade" (chapter 11).īlack crosses on the midline show that the market just entered a squeeze (Bollinger Bands are with in Keltner Channel). Use the updated source instead of the what TV shows below. Fixed a typo in the code where BB multiplier was stuck at 1.5.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |