![]() The histogram bars are color-coded for ease of interpretation. However, I only look for trades on the long side. If the momentum is above the zero line and rising (light blue bars), buy long if the histogram is below the zero line and falling lower (dark red bars), that indicates a shorting opportunity. The momentum histogram helps to determine the direction in which to trade. A buy signal is on the first green dot after one or more red dots. 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. While volatility levels are low, the squeeze dots will be red. The Squeeze dots signal when volatility conditions are right to buy the momentum histogram indicates the direction (long or short) in which to trade. The TTM Squeeze indicator has both volatility and momentum components. I prefer to use it on larger timeframes to confirm the likelihood of trend continuation on the long side. I personally am not a day trader and would not recommend it on lower timeframes due to the possibility of many false signals. I do have it on my 60minute charts but prefer to use this indicator on the daily for bigger picture trend guidance. I prefer to use this indicator on the Daily timeframe or above, for example, the weekly or monthly. Nuance and Traps to Avoidįurthermore, the timeframe you choose to use this indicator on is also important. However, as it is not that great for me in timing exits. The indicator is great at finding good entries on strong stocks. For example, as I have already mentioned, I do not use it to go short. There is some nuance to how I use the TTM squeeze indicator. ![]() I do not use this indicator to short strong stocks that may go higher that is part of my trading strategy in these markets. The TTM Squeeze helps me get confirmation on a possibly great entry on my favorite stocks. ![]() You can read more about my favorite setup here. I use this consolidation as a place to enter for a possible further up leg. My favorite setup is a strong stock that has pulled back and begun consolidating. With the amount of Fed purchases and trillions in savings on the sidelines I am not one to fight market fundamentals. You see, we are in a cyclical bull market. However, given the state of the markets, I only use the TTM Squeeze indicator to go long. 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. The TTM Squeeze indicator also uses a momentum oscillator to show the expected direction of the move when the squeeze fires. 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. ![]() 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. If the Bollinger Bands are completely enclosed within the Keltner Channels, that indicates a period of very low volatility. The volatility component of the TTM Squeeze indicator measures price compression using Bollinger Bands and Keltner Channels. ![]()
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