Using TTM Squeeze Indicator on Thinkorswim for high probability trades: swing trading & day trading

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Introduction

Greetings everyone, welcome back to the channel. I'm Constantine, and in today's discussion, we will delve into the TTM Squeeze indicator and its application in trading strategies on the Thinkorswim platform by TD Ameritrade.

To begin, let's set up the TTM Squeeze indicator on a chart of Novavax (NVAX), a company known for its work on a COVID-19 vaccine. By adding the TTM Squeeze indicator through the Thinkorswim platform, we observe red and green dots along with a histogram displaying momentum levels in various colors. These markers indicate potential buy or sell signals based on momentum shifts represented on the histogram.

When utilizing the TTM Squeeze indicator, red dots signify compressed volatility, suggesting an imminent significant price move. The first green dot following a series of red dots signals a buy or sell opportunity based on the momentum trend depicted in the histogram. Positive momentum is seen above the zero line, with varying colors indicating the strength and direction of the momentum.

Analyzing Novavax's chart with the TTM Squeeze indicator reveals patterns of price action corresponding to momentum shifts. The indicator helps traders identify potential entry and exit points based on increasing or decreasing momentum levels leading to significant price moves.

In a practical example with Novavax, Constantine showcases a trade triggered by a TTM Squeeze pattern that resulted in a 70% gain. He emphasizes the importance of analyzing the duration of the squeeze and the momentum trends for making informed trading decisions.

The TTM Squeeze indicator can be applied across different timeframes, making it versatile for day traders and swing traders alike. Whether trading on short-term intervals like five-minute charts or longer timeframes such as weekly charts, the TTM Squeeze indicator provides valuable insights into market momentum and potential trade opportunities.

In the upcoming video, Constantine plans to demonstrate how to create scans to identify stocks in a squeeze, streamlining the process of finding high probability trade setups. By leveraging the TTM Squeeze indicator effectively, traders can enhance their strategies and improve their trading outcomes.

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Keywords: TTM Squeeze indicator, Thinkorswim platform, trading strategies, momentum levels, buy signals, sell signals, price action analysis, swing trading, day trading, trade setups, market momentum, high probability trades

FAQ:

  1. Can the TTM Squeeze indicator be used for both day trading and swing trading?

    • Yes, the TTM Squeeze indicator is versatile and can be applied to various timeframes, making it suitable for both day trading and swing trading strategies.

  2. How does the TTM Squeeze indicator help traders in identifying potential trade opportunities?

    • The TTM Squeeze indicator highlights periods of compressed volatility, signaling an impending significant price move. By analyzing momentum levels and patterns, traders can make informed decisions on when to enter or exit trades.

  3. What should traders consider when interpreting the signals from the TTM Squeeze indicator?

    • Traders should pay attention to the duration of the squeeze, the colors on the histogram indicating momentum strength, and the patterns of price action corresponding to these momentum shifts to assess the potential for high probability trades.