Trading the TTM Squeeze Using Stockcharts

The TTM Squeeze

The TTM Squeeze is one of my favorite trading tools. Why?

As a trader and investor, identifying when the price is likely to make a big move — before it happens — is critical to success! How many times have you looked at a big move that happened and said to yourself, “Wow, if I only could have gotten in before…!” Well, that is what the TTM squeeze works to prevent by highlighting consolidation when it’s happening so you can jump on the move before it takes off.

How Does it Work?

The market does not make big moves all of the time. In fact, a vast majority of the time, the market as a whole and individual underlying securities are merely chopping around. This can be quite boring to those who love jumping on a directional move. But, you know how they say, ‘Attitude is everything?’ This is especially true in this case!

Traders and investors should consider consolidation, especially consolidation likely to break out (i.e., security in a squeeze), an opportunity, and a distinct moment in time.

Yes, it’s boring when a chart gets stagnant. What is not boring is getting in when it’s stagnant and riding it as it takes off!

Trading the Squeeze

So, how do you trade the squeeze? Well, there are many ways to do it. Over time, I have discovered and determined that I prefer to primarily trade the squeeze in the direction of the trend.

I also like to trade the squeeze when I have multiple squeezes across timeframes (i.e., a squeeze on a 195-minute chart and a squeeze on a daily chart combined) or when I have squeezes combined across stocks and sectors (i.e., a squeeze in the VanEck Semiconductor ETF SMH along with squeezes in its top stocks like Nvidia (NVDA) and Broadcom (AVGO).

One critical component in my trading is combining the squeeze with Fibonacci analysis. This is because when trading a directional move, you need to know where your resistance zones and targets are! This is what Fibonacci analysis is for.

The TTM squeeze can be found in ThinkorSwim by TD Ameritrade, and you can also find it on Stockcharts. In the video below, I go over using the TTM Squeeze in Stockcharts and five of the top squeezes right now! Learn more below:

Want to learn more? I just joined David Keller on Stockcharts TV for the latest episode of The Final Bar. We discussed top setups, including the on-going short-covering rally and how to trade it. Learn more on Youtube today! 

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