![]() ![]() During periods of low volatility, Bollinger bands narrow and trade inside Keltner channels. ![]() Once the Bollinger Bands expand and again move outside the Keltner Channel, the dots will turn GREEN, signifying that the squeeze has “fired”. The dots across the zero line of the Squeeze indicator will turn RED, signifying this period of market compression. ![]() When the Bollinger Bands (above in cyan) go inside of the Keltner Channel (above in red), the market is said to be in a squeeze. The first two are Bollinger Bands and Keltner Channels – they trigger the red and green dots. The Squeeze indicator was built from 3 components. ![]() If we can identify the time of a coiled market we can be in a position to take advantage of a potentially strong move in one direction. The Squeeze is based on the idea that price compression leads to price expansions. When applied and interpreted properly, the Squeeze will add a great deal of information to your analysis in any time frame. If this is the case, take caution and, as always, confirm with other analyses, as no technical analysis tool should be used alone. If the angle of the momentum is returning to the zero line, then there may be a pause or reversal in direction of price. If the oscillator is below the zero line, then bias is short, and vice versa. How to know that a squeeze is happening? The momentum oscillator shows long or short bias and potential for directional movement in stock price. The higher the compression, the more potential energy is building. The Squeeze itself (the dots on the zero line) is directionless, and the dots serve as an indication that a potentially explosive move in price is coming. When the Bollinger Bands expand outside the Keltner Channels the dot turns green in the histogram signaling the beginning of the volatility expansion.The TTM Squeeze indicator is a multi-component trading indicator, made by Simpler Trading, that has helped thousands of traders scale their accounts. The red dots signal a squeeze when the Bollinger Bands® are squeezed into Keltner Channels, you can see this on the chart below. Green dots are a condition of no squeeze and the red dots show up to signal when the price action is squeezing. The zero line is the horizontal line is where the squeeze is visualized by green and red dots. The blue vertical lines are positive momentum and the orange vertical lines are negative momentum in relation to where they are above or below the horizontal zero line. The momentum oscillator is the vertical histogram which indicates the direction momentum is moving in on the chart. This helps to identify when a chart is compressing or ‘squeezing’ into a tight range as this signals when the probability becomes higher that prices could break out of a tight range and begin to trend or see a large trading range price expansion.īy helping to identify when the potential for time periods of volatility are about to begin, the TTM Squeeze can be a good technical tool for trading price action as it transitions from a slow low volatility range to a fast high volatility trend. The BB/KC Squeeze Indicator, more popularly known as the TTM Squeeze Indicator is both a volatility and momentum indicator that visual shows the correlation between Bollinger Bands® and Keltner Channels on a chart. ![]()
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