#Squeeze momentum indicator meaning how to#

It does not, however, tell you in which direction that volatility is going, which is why it needs to be used in conjunction with others for a successful trade. Average directional index (ADX) indicator : This is used to measure volatility, with a high wave (over 20) meaning high volatility, and a low wave (under 20) meaning low volatility.As mentioned, the TTM squeeze pairs well with other indicators. Reading and using the TTM indicator are two different things. It is best used in conjunction with other indicators and trading tools. The TTM squeeze provides a trader with invaluable information, but as with any trading tool, nothing is ever 100% certain. If, however, the red dots turn green but the bars are showing downward momentum, then the trader should go short on their trade. Traders can look at the TTM squeeze and recognize that if the red dots turn to green and the bars are showing upward momentum, then they should go long. If the histogram’s bars are below the 0-line, downward momentum is indicated. If the histogram’s lines are rising above the 0-line, upward momentum is expected. The TTM squeeze histogram: The histogram shows whether the asset’s value is going in upward or downward momentum.When the Bollinger band comes out of the Keltner channel, the dots will turn green as a sign that the market has “fired.” The best time frame for carrying out a trade, according to a TTM squeeze, would be as soon as the dots turn from red to green. When the Bollinger band travels within the Keltner channel, the asset is understood as being in a squeeze (represented by red dots).

Red and green dots running along a 0 line: These dots represent the readings of the Bollinger bands and Keltner channel on an asset.

The main components of a TTM squeeze are: It indicates that the asset’s volatility is likely to increase, so traders can make great profits by timing their market entry and exit. This period, when the volatility of the asset moves into the average value of the asset, is known as a squeeze. It does this by checking for the period in which Bollinger bands (showing changes in volatility) enter into the realm of the Keltner channel (showing a 10-day moving average of an asset). The TTM squeeze indicator is a tool that considers both the Bollinger bands and the Keltner channelof an asset to evaluate where the market will change into a trend.

#Squeeze momentum indicator meaning how to#

(Source: ) How to Read the TTM Squeeze Indicator and How Does the TTM Squeeze Work? Thus, knowing whether the value is likely to trend continuously in one direction, or if it’s likely to revert is of paramount importance.Īn oscillating pattern seen through a candlestick chart. On the other hand, if the asset’s value continues to climb in a trend, that strategy will not work. If an asset’s value is increasing but is expected to revert to the mean value in an oscillating pattern, traders can engage in a reversion to the mean trade (otherwise known as an oscillating trade). The TTM squeeze indicator is therefore the market analysis tool used by traders to identify when they can enter or exit a marketfor the best chance of profitability.Īs a volatility-based indicator, the TTM squeeze indicator shows when an asset is going to change from a trending market to an oscillating one, and vice-versa. If a trader can identify the point before that asset enters a trend, they can prepare their trade accordingly and enter the market at the best possible point. If the market enters a trend, for example when smart contractsmade Ethereum (ETH)incredibly popular, the value of an asset can skyrocket.

Carter, the TTM squeeze was created to show when a contracting market was about to explode into a trending market. To efficiently use the TTM indicator, a trader will: 1 Look to see if the asset is in a squeeze 2 Check the direction of the bars on the TTM squeeze’s histogram 3 Check the power of the squeeze 4 Check the TTM wave to confirm the direction.Ĭreated by John F.The TTM squeeze pairs well with other indicators, such as the Average directional index (ADX) indicator, The TTM wave, etc.The TTM squeeze indicator is a analysis tool used by traders to identify when they can enter or exit a market for the best chance of profitability.

One technical indicator that has proved useful time and time again, is known as the TTM squeeze indicator. Traders employ a variety of technical indicators to help them with their analysis of an asset’s performance. The TTM Squeeze Indicator: What Is It and How to Use It?