Master the TTM Squeeze Indicator on Thinkorswim - YouTube

So what is the squeeze indicator and how do you use it in this video I'm gonna

walk you through how to profitably trade squeezes so you can catch huge moves in

the market hey how's it going on this channel you will learn the steps

it takes to make a full time income trading in the stock market so if you're

new here consider subscribing and today we're talking about the squeeze

indicator so the basic idea of the squeeze is that it is a volatility

indicator and so when something is in a squeeze is a volatility is low and then

when it is out of a squeeze the volatility is high so when a stock comes

into a squeeze or denoted by the indicator down here these dots become

red that is when a stock is in a squeeze and that means that the volatility is

low compared to what it normally is and because it's abnormal that means it's

gonna have to eventually go back to the norm and in this case that means that

there is going to be an increase in volatility and using that we can predict

large moves in a certain direction now you can't just use the squeeze alone and

just blindly trade these red dots the main goal here is to understand that ok

this stock is in a squeeze and I'm going to see a large move here pretty quickly

once the squeeze fires and so when you see that you buy into the stock with the

squeeze and then once the squeeze happens you can see once these dots down

here turn to green and the squeeze takes off you can see that the stock takes off

as well and you know again on this one the stock is kind of flat consolidating

when it's in a squeeze and then when the squeeze fires or these dots turn green

the stock has a large up move again and that is the whole idea of the squeeze to

try and capture these kind of moves and predict that these moves are going to

happen using this indicator and as well as just general price action and

watching the chart using the squeeze this way is trading it like a moment

trade so you want to have a stock that has large momentum and this stock right

here is Amazon being a gross stock this stock has a ton of momentum so just

about every time that it has a squeeze it's gonna make a large move to the

upside because it's just consolidating or catching its breath

before it makes that next run higher squeezes don't always just fire to the

upside but the idea here is that generally they will fire the direction

of the trend so with these three squeezes we can see on the chart right

here these squeezes all fired long and this last squeeze that we had where you

can see that these dots were red the squeeze did fire the other direction but

you can see that the squeeze still signaled the beginning of a huge down

move that Amazon has had over the last couple weeks you will see that on the

indicator down here there are also four different colored bars coming off of the

green dots and so these are momentum bars they signal where the momentum in

the stock is going based on this squeeze indicator and volatility these teal bars

mean that the momentum is up and that it is above the zero line you can see that

down here if we go all the way across over here on the right it says zero and

so that means that the you know the momentum is either positive or negative

and then what this indicates the difference between this color and then

the dark blue color is that on the dark blue color the momentum is decreasing

even though it is still positive and then the teal color or the light blue

color the momentum is positive and increasing and then on the flip side the

red is the momentum is negative and it's decreasing and then the yellow is that

it is negative but it is increasing and so you can see that these help you gauge

where the momentum in the stock is going and if it's gonna potentially go up or

down the most powerful way to use this kind of oscillation and

- indicator with the squeeze if we zoom in on this squeeze right here you can

see that the momentum even though this stock has had this up move and then it's

really it's really in this bull flag right here so this is a really strong

rice pattern that you really want to be able to spot is very powerful with these

squeezes Amazon here has just made a large move after earnings and is now

consolidating you see that the momentum was really strong

to the upside and now the momentum is now decreasing but because the momentum

is decreasing but the stock is actually is really just staying flat here that is

a really strong set up for a squeeze you can see that we have a squeeze that

begins to initiate here by those red dots and that is when you want to be

buying it you want to be buying it here when you see this squeeze happen and you

see that the stock is just kind of sitting there as the momentum is

decreasing because once this momentum finishes decreasing and it starts

increasing you are going to start getting a large or potentially large

move to the upside and we can see that by once this starts to increase you can

see that Amazon begins to take off here this is really a prime set up for the

squeezes not everything will look like this you'll get squeezes in markets that

are just chopping all over the place and you don't really want that you want the

market to look like this where it's just gone up and it's kind of sitting there

and that squeeze develops and the momentum decreases into the squeeze and

then once that squeeze is gonna potentially fire and the momentum

changes that's when you're gonna get your large moves zooming back out here

you can see that Amazon had this doubt large down move and then it moves back

up into this squeeze this squeeze formed here and this is where you would want to

be starting to pick up the trade now a another big thing that is really a

strong tell that you're gonna get a potential strong move is that Amazon is

sitting at practically all time highs levels and just setting that squeeze up

so because it's just budding its head against that large resistance and

setting up this squeeze that means that once it breaks through into all-time

highs there are gonna be tons of people wanting to buy it and so you're already

gonna be in the stock before it breaks there and you're gonna get that added

large move in your favor moving on to this next squeeze right here we can see

that Amazon after that move Amazon sells off and begins to go into that flag out

pattern again now this pattern is definitely not as strong as the last one

but again Amazon has come up and then is kind of sitting at a flag out price and

this is what happens after big stocks make large moves like this people are

gonna sell and take some of their profits now it is really important to

understand that here some profit taking happen and Amazon had a few really red

days but you can see that Amazon then sat here for a few days and just

consolidated and you would have seen this squeeze developed down here and

that's when you would have wanted to look to be buying into this and

realizing that you know hey this stock is still insanely strong and this is

just a pullback and a strong consolidation before this next move and

the squeeze down here is telling me that momentum has decreased and then once it

begins to increase even though you can see down here the there's a tiny red

bars meaning that the momentum was negative for a little bit that is okay

the momentum was decreasing and it just got negative for a little bit the still

the main idea is once it flips you can see that this momentum right here

there's a tiny little yellow bar saying that the omentum is still negative but

it is now moving to the upside that is essentially right at this bar right here

and so that would be a very strong signal bar to get long now the main key

here is that the indicator and the price action are telling you the same thing

this bar right here is a very bullish bar and just looking at the chart alone

this looks like a breakout now looking at the squeeze indicator

here this looks like a very strong squeeze setup the momentum has come down

the momentum is now shifting higher it is still in a squeeze and it wants to go

up and it's probably gonna want to start going up and these both being in

alignment are a key very important thing to getting into squeezes that actually

work plenty of squeezes don't work it is all about finding these squeezes that

line up perfectly and are saying the same thing this squeeze right here is

saying this is gonna go long or the momentum is gonna go higher the stock

right here is saying that the momentum or the price is gonna go higher and

that's really what you want to be looking for these trades are gonna make

you great profits when you trade them with either shares or options this next

squeeze over here is zooming in on it is definitely kind of a dud and I want to

show you why this is not necessarily a trade you want to take the stock has

made that last run up from that last squeeze you're gonna want to be looking

for that next squeeze to get in and seeing where the stock consolidates now

the momentum here has come down and you do have those red dots forming showing

you that that squeeze is happening but you don't really have that kind of flag

out price action sure you kind of have it here but the stock is then sold off

and come back up and so unlike the last two it's not a really perfect alignment

of pattern and you can see that once the squeeze fired from right about here the

stock had already made most of this this move that had this is definitely more of

a swing trade right here and that's not what you're looking for with the squeeze

with the squeeze you're looking for this on a flag out here or this consolidation

period and then this move afterwards once the squeeze has told you that you

know I need to get in here and then I'm gonna be able to capture this move this

squeeze only told you to get in about here and that would be you know

potentially at the end of the day and so this was not a strong move here for you

to make much money off of this is not what you're looking for when you're

wanting to trade the squeeze you want to look for those or really consolidation

patterns with the price of the stock and the squeeze indicator lining up and

telling you the same thing the squeeze here is telling you that yes the

momentum is going to go higher and it's going to be great but the stock has

already made that move here and so those two are not in alignment and so this

squeeze is kind of a dud but looking at the chart here you can notice that we

did have this strong up move and then another flag out pattern establishing

and you can see that there's no squeeze developing here and so how you trade

this this is essentially a smaller time frame type of squeeze and so what you're

gonna want to do here is you're gonna want to go into a smaller time frame and

we're gonna see that there is a squeeze here that you would still be able to

capture this already hefty move here from about 1900 to 2000 so what I'm

gonna do here is go into a a hundred and ninety five minute chart and we can zoom

in on that section now one hundred and ninety five minute chart is essentially

half a trading day a trading day is six and a half hours long one hundred ninety

five minutes is half of that and so that essentially makes it so two bars is one

trading day most people do you know hour-long charts or two hour-long charts

those don't fit into a trading day very well

it's a lot better to break your chart up in the bars that fit into a daily or

into a trading day perfectly so you can see so looking at the chart here is that

trade that we were looking at so zooming in on this we can see that there is this

squeeze here down here we have the squeeze forming and after this large up

move and that flag out that we were looking at right so here is that squeeze

and you can see that it's this is this was all-time highs right here at that

moment and it's hit all-time highs it's sold off a little bit but it came right

back up here and it's you know it's just consolidating and you get the squeeze

indicator telling you that momentum or volatility is deep

creasing here and that once the volatility expands again you're gonna

get a potentially large move in a direction again we have all those things

lining up momentum was higher the stock was higher momentum is now decreasing

and the stock is decreasing a little bit you can see but really overall over this

time frame it really didn't decrease that much we want to see the squeeze

shift from momentum and you can see that happened in this area and that gives us

plenty of time but in this area to pick up either shares calls spreads whatever

you're wanting the trade here and it allows you to capture this large move

once that momentum really takes off and pushes Amazon higher into more all-time

highs now I'm sure you're wondering when do you exit how do you know that this

move here is over because once you get you can see down here once this momentum

shifts the stock is gonna go down right or this indicator to eventually tell you

that you're you can potentially lose a lot of your profits and so what you want

to do here is use Fibonacci extension so if I turn on my Fibonacci tool I can

take a Fibonacci rice extension from this swing here that was right before

the squeeze and we can see that if I add the two six one eight which is another

strong resistance level this is going to give you levels of resistance to sell

your trade now if you're new to Fibonacci I will link a video on

Fibonacci and how to use this in your trading but here the main thing is that

you can see using using this quick drawing tool we can see that we probably

want to take profits at this level and this level these are two really strong

resistance levels you can see that here Amazon blew right through this one level

one key indicators showing that it will probably do that as you can see down

here there is a large amount of volume compared to what it had before these

blue bars down here are and with these huge up moves here you

can see that there is a ton of volume pushing through that six one eight level

and so that is going to potentially push the stock higher but definitely once you

get to this two six one eight level you want to be really aware that you're

probably gonna have the trend change or end there or at least have a profit

taking pullback and so if you're buying all the way down here you're definitely

gonna be wanting to sell ninety percent or take all of your profits because

chasing or getting greedy for more than this is really going to make you a

losing trader in the long run sure you can have moves that are insanely big and

that can get you insane 5x returns but a trade like this is going to make you a

very profitable trader if you can get these every time or get these even 50%

of the time you can see that if you tried to chase farther than the two six

one eight level the stock then quickly as it hit that level it sold right off

and gave back almost all of your profits that you would have had and holding

through a pullback like that really sucks if you've just made a ton of money

and potentially double or triple your options a big key in finding these kind

of stocks is seeing that they are in a strong trend in the long term so or

Amazon here if we zoom out into a daily chart showing the last year you can see

the is a in a large uptrend now it's doing that to a weekly chart

you can see that it is in a large uptrend again this is really important

to align everything with your trading you want to be trading with the trend

and having Amazon being in a strong overall trend is just gonna make it a

lot easier for you to have those winning trades more consistently now you can see

that this squeeze indicator is also here on a weekly chart and if we look at the

last weekly squeeze you can see that Amazon did amazing off of it and

everything for the squeeze aligned so you don't have to necessarily use this

on a smaller time frame you can use this on a weekly

chart just about everything aligned here on this squeeze the price action had a

up move and then it began to chop sideways for a while and you can see

that squeeze on a weekly chart developed and then once the momentum started to

turn positive right about here you would be wanting to look to buy or go along

Amazon and you can see the aftermath of this squeeze firing once this squeeze

fired and this momentum happened Amazon just about doubled and so even holding

just shares alone grew as squeeze like this can be extremely strong and can

make you a ton of money hey thanks for trying this video I hope you found it

useful in my next video right here I will show you how to set up a scan so

you can find these squeezes a lot easier other than just looking at charts all

day now if you want to just learn more about the stock market make sure to

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