Thu. Jun 13th, 2024

What is the TTM Squeeze?

The TTM Squeeze is a popular trading indicator that is often used by traders on the tradingview platform. It is a volatility-based indicator that helps traders identify periods of consolidation in the market followed by potential breakouts. Developed by John Carter, the TTM Squeeze uses Bollinger Bands and Keltner Channels to plot a histogram that represents the volatility compression.

How does the TTM Squeeze work?

The TTM Squeeze indicator combines both the Bollinger Bands and the Keltner Channels to analyze the volatility of a market. When the Bollinger Bands contract and move inside the Keltner Channels, it indicates a period of low volatility, or a squeeze. Traders interpret this as a sign that the market is likely to see a significant move in either direction.

The TTM Squeeze indicator plots a histogram that captures these periods of low volatility. When the histogram is green, it suggests that the Bollinger Bands are inside the Keltner Channels and a squeeze is occurring. Conversely, when the histogram turns red, it implies that the squeeze has ended, and a breakout may be imminent.

Using Tradingview for TTM Squeeze

To use the TTM Squeeze indicator on Tradingview, follow these steps:

  • Open Tradingview on your preferred web browser.
  • Choose the desired trading instrument and timeframe.
  • Click on the “Indicators” button.
  • Type “TTM Squeeze” in the search bar.
  • Select the TTM Squeeze indicator from the results.

Once applied, the TTM Squeeze indicator will appear on your trading chart, and you can customize the settings according to your preferences.

Interpreting TTM Squeeze Signals

The TTM Squeeze indicator provides traders with several signals:

  • Green Histogram: Indicates a volatility squeeze and potential consolidation period.
  • Red Histogram: Suggests the squeeze has ended, and a breakout is likely.
  • White Dots: Represents volatility expanding after a squeeze, indicating a potential strong move in the market.

Traders can use these signals to identify potential trading opportunities.

Tips for Using TTM Squeeze

Here are some tips to consider when using the TTM Squeeze indicator:

  • Combine the TTM Squeeze with other technical analysis tools for confirmation.
  • Consider using the TTM Squeeze on multiple timeframes for a broader perspective.
  • Use stop-loss orders to manage risk in case the market moves against your expectations.
  • Monitor the overall market conditions and news events that could impact volatility.

Conclusion

The TTM Squeeze is a powerful tool for traders on Tradingview to identify periods of low volatility and potential breakouts. By understanding how the indicator works and interpreting its signals, traders can enhance their trading strategies and make informed decisions in the market.

Remember to use the TTM Squeeze in conjunction with other analysis techniques and always practice proper risk management for successful trading outcomes.

By admin