The squeeze is a multi component indicator. The squeeze itself (the dots on the zero line) are directionless, they are merely an indication that a potentially explosive move in price is coming. The higher the compression, the more potential energy is building.
The momentum oscillator shows long or short bias and potential for directional movement in price.
If the oscillator is below the zero line, then bias is short, and visa versa.
If the angle of the momentum is returning to the zero line then there may be a pause or reversal in direction of price. If this is the case, take caution and, as always confirm with other analysis. No single tool should be used in a vacuum
Used properly, the squeeze will add a great deal of information in your analysis on any time frame.
What is The Squeeze?
The Squeeze is the indicator that built Simpler Trading and has helped thousands of traders build their accounts.
The Squeeze is based on the idea that price compression leads to price expansions. If we can identify these times when a market is “coiling” we can be in a position to take advantage of the directional move.
Every trader at Simpler Trading uses the Squeeze, and for good reason. There is no better indicator to show these times of opportunity right before a directional move.
The Squeeze indicator was built from 3 components. The first two are Bollinger Bands and Keltner Channels. These are what trigger the red and green dots. When the Bollinger Bands (below in cyan) go inside of the Keltner Channel (below in red), the market is said to be in a squeeze. The dots across the zero line of the Squeeze indicator will turn RED, signifying this period market compression. Once the Bollinger Bands expand and again move outside the Keltner Channel, the dots will turn GREEN, signifying that the squeeze has “fired”
The final component of the Squeeze indicator is a momentum indicator. Once the Bollinger Bands move outside of the Keltner Channel, a Squeeze has “fired”. In order to determine the direction of the move, we then look to the momentum. If the angle of the momentum bars are positive, then squeeze has fired long. Inversely, a short squeeze would be signified by negative momentum. (The yellow arrows below show the formation of 2 squeezes with corresponding momentum readings.)
Why do we need the Squeeze?
Markets trade sideways and chop around 80% of the time – the other 20% of the time, they are making directional moves. John wants to identify entries in these moves BEFORE the tickers took off. His goal is being positioned in a move before it takes off, that will allow him to take profits as the trade takes off and other traders finally take notice of the move.
How do I get the Squeeze?
The Squeeze is built into the TOS platform. If you use TOS, find it by going to:
Studies > Add study > John Carter's Studies > TTM_Squeeze
If you are not using TOS, the Squeeze can be purchased for available platforms like Trading View, Tasty Works and Tradestation.
About - Squeeze Radar
About - Squeeze Pro
Multi Squeeze Indicator
Watchlist - Squeeze Watchlist Column code and shared links
About - Triple Squeeze Indicator
Squeeze Scan in TOS
About - Multi Squeeze Pro
About - Multi Histogram
Multi Squeeze Pro - settings