How to Use the Main TTM Indicator for Trading

26 October 2023Last Updated: 7 October 2024

185 2 minutes read

The main TTM indicator is a technical analysis tool that combines the concepts of momentum and volatility to identify potential trading opportunities. The main TTM indicator consists of two components: the TTM squeeze and the TTM momentum.

What is the TTM Squeeze?

The TTM Squeeze is an indicator that measures the relationship between the Bollinger Bands and the Keltner Channels. The Bollinger Bands are a set of two standard deviation bands that surround a moving average, while the Keltner Channels are a set of two average true range bands that also surround a moving average. The idea behind the TTM squeeze is that when the Bollinger bands are inside the Keltner Channels, it indicates a period of low volatility and a potential breakout. When the Bollinger Bands are outside the Keltner Channels, it indicates a period of high volatility and a potential trend continuation.

What is the TTM Momentum?

The TTM Momentum is an indicator that measures the rate of change of the price over a specified period of time. The TTM Momentum can be displayed as a histogram or as an oscillator. The histogram shows the difference between the current momentum and the previous momentum, while the oscillator shows the current momentum as a percentage of the maximum and minimum momentum values. The idea behind the TTM Momentum is that when the momentum is positive, it indicates an upward price movement, and when the momentum is negative, it indicates a downward price movement.

How to Use the Main TTM Indicator for Trading?

The main TTM indicator can be used for trading by combining the signals from both the TTM Squeeze and the TTM Momentum. A possible trading strategy is as follows:

Wait for the TTM Squeeze to indicate a low volatility period by showing red dots on the histogram.
Wait for the TTM Momentum to cross above or below zero, indicating a change in momentum direction.
Enter a long position when the TTM Squeeze turns green and the TTM Momentum is positive, or enter a short position when the TTM Squeeze turns green and the TTM Momentum is negative.
Exit the position when the TTM Squeeze turns red again or when the TTM Momentum changes direction.

Conclusion

The main TTM indicator is a useful tool for traders who want to capture price movements based on momentum and volatility. The main TTM indicator can help traders identify periods of low volatility that may lead to breakouts, as well as periods of high volatility that may indicate trend continuation. By combining the signals from both the TTM Squeeze and the TTM Momentum, traders can increase their chances of entering and exiting trades at optimal times. However, as with any technical analysis tool, traders should also consider other factors such as market conditions, risk management, and trading psychology before making any trading decisions.