TTM Trend (TTM Squeeze)

Parameters: bb_period = 20 (10–50) • bb_mult = 2 (1.5–3) • kc_period = 20 (10–50) • kc_mult = 1.5 (1–2.5)

Overview

The TTM Squeeze combines two powerful concepts: volatility compression detection and momentum analysis. The squeeze occurs when Bollinger Bands contract inside Keltner Channels, indicating extremely low volatility that typically precedes explosive moves. This consolidation phase is shown as red dots on the indicator, while green dots signal the squeeze has "fired" and volatility is expanding. Simultaneously, a momentum histogram oscillates around zero, providing directional bias for the anticipated breakout.

John Carter's innovation lies in recognizing that periods of unusually low volatility cannot persist indefinitely. By using the original Keltner Channels formula from Chester Keltner combined with standard Bollinger Bands, the indicator identifies when market energy is coiling like a spring. The momentum component then helps traders determine whether to position long or short when the squeeze releases, with the histogram's color coding (light/dark blue above zero, red/yellow below) indicating momentum strength and direction changes.

Interpretation & Trading Signals

Squeeze Detection & Entry:

  • Red Dots: Squeeze is on - Bollinger Bands inside Keltner Channels
  • First Green Dot: Squeeze fires - primary entry signal after red dots
  • Momentum Above Zero: Go long when histogram is positive
  • Momentum Below Zero: Go short when histogram is negative

Exit Strategies:

  • 4-Bar Rule: Initial thrust typically lasts 4 bars - first profit target
  • 8-10 Bar Duration: Most squeeze moves complete within this timeframe
  • Color Change: Exit after two consecutive bars of momentum weakening
  • Zero Line Cross: Consider exit when momentum crosses back through zero

Advanced Techniques:

  • Multi-Timeframe: Stronger signal when squeeze fires on multiple timeframes
  • 75% Success Rate: Based on 15 years of trading data
  • Kill Bad Trades: Exit quickly if move doesn't materialize
  • Risk Management: Use proper position sizing for explosive moves

Example Usage

Code examples will be available once the Rust implementation is complete.

Performance Analysis

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