The TTM Squeeze indicator is used in technical analysis to spot periods when the market is less volatile, which often precede larger price movements. It is a combination of two indicators: Bollinger Bands and Keltner Channels. When the price range (volatility) shrinks, it indicates a potential breakout or breakdown in price, which traders can use to their advantage.

How Does the TTM Squeeze Indicator Work?

The TTM Squeeze works by measuring the relationship between the Bollinger Bands and the Keltner Channels. When the Bollinger Bands contract inside the Keltner Channels, it signals a "squeeze" and suggests that the market is experiencing low volatility. This contraction typically indicates that a breakout is likely, either to the upside or downside. Traders use this signal to enter trades when the price breaks out of the squeeze zone.

How to Use the TTM Squeeze Indicator?

To use the TTM Squeeze indicator, traders monitor when the Bollinger Bands contract within the Keltner Channels. This is called the "squeeze." Once the squeeze occurs, traders wait for the price to break out of this range, indicating a potential upward or downward trend. The TTM Squeeze is particularly useful for traders who want to identify low-volatility periods and capitalize on the price movement when volatility picks up again.

What are the Benefits of the TTM Squeeze Indicator?

The TTM Squeeze indicator is beneficial because it helps traders identify periods of consolidation before a big price move. By using this indicator, traders can reduce the risk of entering trades during times of low volatility and increase their chances of capturing larger, profitable trends. It also provides a clear, visual signal for when to enter or exit a trade based on market conditions.

What is the Squeeze Signal in TTM Squeeze?

The "squeeze" signal in the TTM Squeeze occurs when the Bollinger Bands contract and fall within the Keltner Channels, indicating low volatility. This is considered a key signal that the price is likely to experience a breakout once volatility picks up. The squeeze helps traders prepare for possible large price movements by giving them early warning signs.