2/9/2024 0 Comments Squeeze momentum indicatorTraders can look at the TTM squeeze and recognize that if the red dots turn to green and the bars are showing upward momentum, then they should go long. If the histogram’s bars are below the 0-line, downward momentum is indicated. If the histogram’s lines are rising above the 0-line, upward momentum is expected. The TTM squeeze histogram: The histogram shows whether the asset’s value is going in upward or downward momentum.When the Bollinger band comes out of the Keltner channel, the dots will turn green as a sign that the market has “fired.” The best time frame for carrying out a trade, according to a TTM squeeze, would be as soon as the dots turn from red to green. When the Bollinger band travels within the Keltner channel, the asset is understood as being in a squeeze (represented by red dots). Red and green dots running along a 0 line: These dots represent the readings of the Bollinger bands and Keltner channel on an asset.The main components of a TTM squeeze are: It indicates that the asset’s volatility is likely to increase, so traders can make great profits by timing their market entry and exit. This period, when the volatility of the asset moves into the average value of the asset, is known as a squeeze. It does this by checking for the period in which Bollinger bands (showing changes in volatility) enter into the realm of the Keltner channel (showing a 10-day moving average of an asset). The TTM squeeze indicator is a tool that considers both the Bollinger bands and the Keltner channelof an asset to evaluate where the market will change into a trend. (Source: ) How to Read the TTM Squeeze Indicator and How Does the TTM Squeeze Work? Thus, knowing whether the value is likely to trend continuously in one direction, or if it’s likely to revert is of paramount importance.Īn oscillating pattern seen through a candlestick chart. On the other hand, if the asset’s value continues to climb in a trend, that strategy will not work. If an asset’s value is increasing but is expected to revert to the mean value in an oscillating pattern, traders can engage in a reversion to the mean trade (otherwise known as an oscillating trade). The TTM squeeze indicator is therefore the market analysis tool used by traders to identify when they can enter or exit a marketfor the best chance of profitability.Īs a volatility-based indicator, the TTM squeeze indicator shows when an asset is going to change from a trending market to an oscillating one, and vice-versa. If a trader can identify the point before that asset enters a trend, they can prepare their trade accordingly and enter the market at the best possible point. If the market enters a trend, for example when smart contractsmade Ethereum (ETH)incredibly popular, the value of an asset can skyrocket. Carter, the TTM squeeze was created to show when a contracting market was about to explode into a trending market.
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