The TTM Squeeze is a popular technical analysis tool used by traders to identify potential breakout opportunities in the markets. This indicator is commonly used in the forex market, and many traders use it to identify buy and sell signals. If you’re interested in using the TTM Squeeze in forex trading, this article will explain how to get it to work on Thinkorswim (TOS).
Step 1: Install the TTM Squeeze Indicator
The first step to using the TTM Squeeze in forex trading is to install the indicator on your TOS platform. To do this, follow these steps:
1. Open your TOS platform and navigate to the “Studies” section.
2. Click on “Edit Studies” to open the study editor.
3. Click on the “Import” button to open the import window.
4. In the import window, enter the following code:
# TTM_Squeeze
def TTM_Squeeze = if StdDev(close, 20) > Average(TrueRange(high, close, low), 20)
then 1
else 0;
def TTM_Squeeze_BB = if BollingerBands().”LowerBand” then 1 else 0;
plot Squeeze = TTM_Squeeze and TTM_Squeeze_BB;
5. Once you’ve entered the code, click on “OK” to import the indicator.
Step 2: Apply the TTM Squeeze Indicator
After you’ve installed the TTM Squeeze indicator, the next step is to apply it to your forex chart. To do this, follow these steps:
1. Open a forex chart on your TOS platform.
2. Click on the “Studies” button at the top of the chart.
3. In the studies window, scroll down until you find the TTM Squeeze indicator.
4. Click on the indicator to apply it to your chart.
Step 3: Interpret the TTM Squeeze Indicator
Once you’ve applied the TTM Squeeze indicator to your chart, the next step is to interpret it. The TTM Squeeze indicator consists of two lines: the Squeeze line and the BB line.
The Squeeze line is a histogram that oscillates between 0 and 1. When the Squeeze line is above 0, it indicates that the market is in a state of compression, which means that volatility is low and a breakout is imminent. When the Squeeze line is below 0, it indicates that the market is in a state of expansion, which means that volatility is high and a breakout has already occurred.
The BB line is a blue line that represents the lower Bollinger Band. When the Squeeze line is above the BB line, it indicates that the market is in a state of compression and a potential long trade opportunity exists. When the Squeeze line is below the BB line, it indicates that the market is in a state of expansion and a potential short trade opportunity exists.
Step 4: Use the TTM Squeeze Indicator in Your Trading Strategy
After you’ve installed, applied, and interpreted the TTM Squeeze indicator, the final step is to use it in your forex trading strategy. The TTM Squeeze can be used to identify potential breakout opportunities, but it should be used in conjunction with other technical analysis tools to confirm trade signals.
For example, you could use the TTM Squeeze in combination with trend lines, support and resistance levels, and moving averages to identify potential trade opportunities. When the TTM Squeeze indicates a potential breakout, you could look for confirmation from other technical analysis tools before entering a trade.
Conclusion
The TTM Squeeze is a powerful technical analysis tool that can be used to identify potential breakout opportunities in the forex market. By installing, applying, and interpreting the TTM Squeeze indicator on your TOS platform, you can use this tool to improve your trading strategy and increase your chances of success. Remember to always use the TTM Squeeze in conjunction with other technical analysis tools to confirm trade signals and minimize risk.
