The TTM Squeeze indicator has five parameters: the period for Bollinger Bands and the Keltner's Channel, the number of standard deviations for the Bollinger Bands, the number of ATRs for the Keltner Channel, the period for the Momentum, and the period for the EMA-smoothing of the Momentum indicator. When the indicator is red, no trade is recommended. When the indicator is green and the Momentum is red, it is considered a sell signal. When the indicator is green and the Momentum Oscillator is colored cyan, it is considered a buy signal. The TTM Squeeze indicator is plotted along with the smoothed Momentum Oscillator. When both bands of the Bollinger Bands indicator are inside Keltner's Channel, that means the squeeze condition and the red dots on the horizontal axis appear. The volatility component of the TTM Squeeze indicator measures price compression using Bollinger Bands and Keltner Channels.The TTM Squeeze indicator uses Bollinger Bands and Keltner's Channel to detect consolidation zones right before a big move. If the Bollinger Bands are completely enclosed within the Keltner Channels, that indicates a period of very low volatility. When the Bollinger Bands expand and move back outside of the Keltner Channel, the squeeze is said to have “fired”: volatility increases, and prices are likely to break out of that tight trading range in one direction or the other.

The on/off state of the squeeze is shown with small dots on the zero line of the indicator: red dots indicate the squeeze is on, and green dots indicate the squeeze is off. The TTM Squeeze indicator also uses a momentum oscillator to show the expected direction of the move when the squeeze fires. This histogram oscillates around the zero line increasing momentum above the zero line indicates an opportunity to purchase long, while momentum falling below the zero line can indicate a shorting opportunity. However, given the state of the markets, I only use the TTM Squeeze indicator to go long. You see, we are in a cyclical bull market. With the amount of Fed purchases and trillions in savings on the sidelines I am not one to fight market fundamentals. My favorite setup is a strong stock that has pulled back and begun consolidating. The momentum histogram depicts the most likely course of the breakout. Squeeze dots, which are parts of the indicator’s volatility portion, indicate potential breakouts after a period of calm trading. I use this consolidation as a place to enter for a possible further up leg. The TTM Squeeze indicator considers both volatility and momentum to assist traders in profiting from swings in the volatility of the security. You can read more about my favorite setup here. The TTM Squeeze helps me get confirmation on a possibly great entry on my favorite stocks. I do not use this indicator to short strong stocks that may go higher that is part of my trading strategy in these markets. There is some nuance to how I use the TTM squeeze indicator. For example, as I have already mentioned, I do not use it to go short. The indicator is great at finding good entries on strong stocks. But at least now you have an alternative if you don’t want to switch back and forth between two different charting platforms. I admit that the squeeze indicator is more visually appealing and easier to read. However, as it is not that great for me in timing exits. The histogram is a smoothed-out version of the momentum indicator. Nuance and Traps to Avoidįurthermore, the timeframe you choose to use this indicator on is also important. I prefer to use this indicator on the Daily timeframe or above, for example, the weekly or monthly. I do have it on my 60minute charts but prefer to use this indicator on the daily for bigger picture trend guidance. I personally am not a day trader and would not recommend it on lower timeframes due to the possibility of many false signals. I prefer to use it on larger timeframes to confirm the likelihood of trend continuation on the long side. The TTM Squeeze indicator has both volatility and momentum components. The Squeeze dots signal when volatility conditions are right to buy the momentum histogram indicates the direction (long or short) in which to trade.

While volatility levels are low, the squeeze dots will be red. When volatility increases and the Bollinger Bands expand until they are outside of the Keltner Channels, the squeeze has “fired” and the squeeze dots will be green. A buy signal is on the first green dot after one or more red dots. The momentum histogram helps to determine the direction in which to trade.

Ttm squeeze momentum indicator