TTM Squeeze Pro

The TTM Squeeze Pro indicator visualizes the relationship between Bollinger Bands and Keltner Channels to identify periods of price compression and potential volatility breakouts. By tracking three distinct levels of market "squeezing" alongside a momentum oscillator, the tool helps traders anticipate explosive price movements.

Usage

The Usage section describes how the script can be used to identify market cycles and potential entry/exit points. The indicator consists of two primary components: a momentum histogram and a series of colored dots on the zero line.

Interpreting Compression Dots

The dots indicate the current state of market volatility based on how Bollinger Bands interact with various Keltner Channel widths:

• Orange Dots (High Compression): Indicates a tight squeeze where Bollinger Bands are within the 1.0 ATR Keltner Channel.
• Red Dots (Medium Compression): Indicates the Bollinger Bands are within the 1.5 ATR Keltner Channel.
• Black/Dark Dots (Low Compression): Indicates the Bollinger Bands are within the 2.0 ATR Keltner Channel.
• Green Dots (No Squeeze): Indicates the squeeze has "fired" as Bollinger Bands move outside the Keltner Channels.

Interpreting the Momentum Histogram

The histogram bars reflect the strength and direction of price action:

• Cyan/Green (Bright): Positive momentum is increasing.
• Blue/Green (Dull): Positive momentum is decreasing (potential reversal).
• Red (Bright): Negative momentum is increasing.
• Yellow/Red (Dull): Negative momentum is decreasing (potential reversal).

Trade Execution Examples

• Entry: Traders often look for a sequence of at least five compression dots (Black, Red, or Orange) followed by the first Green dot to signal a volatility breakout.
• Exit: Positions are typically managed by observing the histogram; for example, exiting a long position when a bright green bar transitions to a duller shade.

Details

The TTM Squeeze Pro is an evolution of John Carter’s original TTM Squeeze. While the original version utilized a single Keltner Channel (1.5 ATR), the Pro version introduces three nested Keltner Channels (1.0, 1.5, and 2.0 ATR). This tiered approach allows for a more granular view of market compression.

The momentum oscillator is calculated using a linear regression of the price relative to the average of the high/low range and a simple moving average. This provides a smoothed representation of price velocity. This specific implementation incorporates refinements from Lazybear's Squeeze Momentum Indicator and Makit0’s Squeeze PRO Arrows to ensure color accuracy and calculation precision.

Settings

• TTM Squeeze Length: Sets the lookback period for the Bollinger Bands, Keltner Channels, and the momentum oscillator (Default: 20).
• Bollinger Band STD Multiplier: Determines the standard deviation for the Bollinger Bands (Default: 2.0).
• Keltner Channel #1: Sets the ATR multiplier for the high compression/orange dot threshold (Default: 1.0).
• Keltner Channel #2: Sets the ATR multiplier for the medium compression/red dot threshold (Default: 1.5).
• Keltner Channel #3: Sets the ATR multiplier for the low compression/black dot threshold (Default: 2.0).
• Alert Price Action Squeeze: Enables alerts when the market enters a compression state.
• Alert Squeeze Firing: Enables alerts when the Bollinger Bands move outside the Keltner Channels (Squeeze Fired).
• Alert Momentum Zero Cross: Enables alerts when the momentum histogram crosses above or below the zero line.

FAQ

What is the difference between the standard Squeeze and Squeeze Pro? The Pro version uses three ATR levels instead of one, allowing traders to identify "High Compression" squeezes which often lead to more significant price movements.

How do I know which direction the price will break? The dots only indicate volatility compression, not direction. Traders look at the histogram color at the moment the squeeze "fires" (turns green) to determine the likely direction of the move.

How can I access the TTM Squeeze Pro? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.