“The Squeeze indicator tries to identify periods of consolidation in the market. In general, the market is either in a period of quiet consolidation or in a vertical price discovery. By identifying these quiet periods, we have more opportunities to get into trades with the potential for big moves. After the market enters a “compression” state, we observe the overall market dynamics to get help in predicting the direction of the market, and expect the release of market energy.”

The Modified TTM Squeeze Indicator is a modification of John Carter’s TTM Squeeze volatility indicator, designed to feed entry points faster than in the original version. This indicator is designed to determine both entry and exit points in strong price movements. The green and red histograms show price movements up and down, respectively. The darker color of the histogram bars indicates that the trend is decreasing. The black crosses on the midline indicate price compression, and the gray crosses indicate release from compression. Trade in the direction of the trend on the first gray cross after the compression. Exit when the trend fades (dark green/dark red).

[spoiler title=”Read More…”]

Do you prefer the original TTM Squeeze? The Modified TTM Squeeze Indicator allows you to switch between the modified and traditional Squeeze indicators.

There are many trading strategies described for the TTM Squeeze indicator, all of which can be used with the Modified TTM Squeeze indicator. A simple effective strategy is described below:

Excellent conditions are when two or more higher timeframes are in a state of compression. Enter the trade when the lower timeframe is released from compression. For example, the 15-minute and 5-minute periods are in the compression state. Enter the trade when the 5-minute period is released from the compression. While compression patterns on higher timeframes usually indicate a large movement, according to observations in Forex, the TTM Squeeze works best on a 4-hour period or less.

The Modified TTM Squeeze also works well in conjunction with ADX indicators.

• BB length (Default=20): The number of bars to calculate the Bollinger bands, used for compression
• BB multiplier (Default=2.0): The number of standard deviations used for the Bollinger bands
• KC length (Default=20): The number of bars to calculate the Keltner channel, used for compression
• KC multiplier (Default=1.5): Multiplier for the Keltner channel
• Use original TTM (Default=false): If true, it changes the behavior of the indicator to the traditional TTM squeeze. If false, the indicator uses a modified TTM squeeze, with improved pulse calculation.
• Allow alerts (true/false): If false, it disables sending notifications
• Alert when squeeze begins (true/false): If true, sends a notification when compression starts
• Alert when squeeze is released (true/false): If true, sends a notification when compression is finished
• Alert when trend fades (true/false): If true, it sends a notification when the uptrend/downtrend fades (indicated by a dark green / dark red line on the histogram)
• Turn on alert message (true/false): If true, notifications will be displayed in a pop-up window
• Turn on alerts sound (true/false): If true, audio signals will be sent
• Turn on alerts email (true/false): If true, notifications will be sent to email

[/spoiler]