![]() This coincided with the tall bullish green candle. The next green dot following the series of red dots on the 19th means the squeeze had fired. The price action will show that the stock is in consolidation. I would wait until you get a few red dots to consider it a valid squeeze. Here is a squeeze in Netflix (NFLX) from August 11th to the 18th of 2021, as indicated by a series of red dots. It also means a move greater than the options prices have priced in. This “greater than expected move” means a 2 to 3 ATR move as indicated by the “ Average True Range” indicator. When the dots become green again, it indicates that the squeeze had just “fired,” releasing its built-up energy causing the stock to make a “greater than expected” move (up or down). The red dots indicate that a squeeze is on - energy is building up under compression. ![]() The free version on ThinkOrSwim and Barchart has only the red dots and the green dots and may be labeled as “TTM_Squeeze.” “TTM” stands for “Trade the Markets,” which was John’s company before it was rebranded to “ Simpler Trading.” In both their presentations, they are using the “Pro” version of the indicator where there are additional “black” (low-compression) and “orange” (high-compression) dots. ![]() Taylor buys on squeeze signals only when the stock is in an obvious uptrend and price is above and close to the 21-day moving average. Traders can also use the 10, 20, and 50 moving averages. John buys after waiting for five “dots” of the squeeze, and if the price is above the 21 moving average and the other 8, 21, 34, 55, and 89 moving averages are stacked in order. You need to be more selective and wait for additional market conditions. Like all indicators, you cannot just take every squeeze signal. ![]() Using Options With The TTM Squeeze Indicator.Taylor Horton said, “you can build a career around this one setup,” and that it was the squeeze setup that allowed him to become a full-time trader. He said, “if there is one setup that I can do for the rest of my life, that’s it right there.” While this indicator is on ThinkOrSwim and Barchart, it is not present in TradingView, StockCharts, and others.Īs an alternative, we will use standard indicators to detect squeezes which give a trader an early warning when a stock is about to make a meaningful move.īefore you dismiss this as “just another indicator,” watch how its creator John Carter takes Squeeze setups with options strategies. Not a recommendation of a specific security or investment strategy.If you ever wished you had the popular TTM Squeeze indicator on your charting platform, then this article is for you. This plot is hidden by default.īollinger Bands® is a registered trademark of John Bollinger. The Boolean plot that shows where the squeeze alert condition is fulfilled. When this ratio is reached, the indicator is on and alerts are generated. The ratio between Bollinger Bands® and Keltner's Channels widths. ![]() The number of deviations to plot the Bollinger Bands® study. The factor for calculating the shift of the Keltner's Channels. The number of bars used to calculate the three indicators: Momentum Oscillator, Bollinger Bands®, and Keltner's Channels. When the indicator is off (red), no trade is recommended. When the indicator is on and the Momentum Oscillator is red, it is considered a Sell signal (this signal is supposed to be correct until two yellow bars in a row). When the indicator is on (green) and the Momentum Oscillator is colored cyan, it is considered a Buy signal (this signal is supposed to be correct until two blue bars in a row). The Momentum Oscillator histogram is smoothed up with linear regression and other techniques. To produce Buy/Sell signals, the Squeeze indicator is plotted along with Momentum Oscillator. When the market finishes a move, the indicator turns off, which corresponds to bands having pushed well outside the range of Keltner's Channels. The Squeeze indicator finds sections of the Bollinger Bands® study which fall inside the Keltner's Channels. When the volatility increases, so does the distance between the bands, conversely, when the volatility declines, the distance also decreases. The Squeeze indicator measures the relationship between two studies: Bollinger Bands® and Keltner's Channels. ![]()
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