TTM Squeeze Indicator | Bollinger Band Squeeze | TSR Screener
TTM Squeeze Indicator
Overview
The TTM Squeeze Indicator, developed by John Carter, is a popular volatility and momentum indicator used to identify periods of low market volatility (price consolidation). These quiet periods are often followed by strong directional price movements.
The indicator helps traders identify stocks that may be preparing for a significant breakout.
How the TTM Squeeze Works
A typical squeeze follows this sequence:
- The stock trades within an extremely narrow price range.
- Buying and selling activity becomes subdued.
- Volatility contracts.
- The squeeze ends with a strong breakout in either direction.
- Bollinger Bands begin expanding.
- Price moves strongly in the breakout direction.
There are several methods to identify a volatility squeeze. In TSR Custom Screener, the squeeze is detected using Bollinger Band-based techniques.
Available Bollinger Squeeze Screeners
TSR Custom Screener provides four different Bollinger squeeze screeners.
1. Bollinger Band + Keltner Channel Squeeze
This is the classic TTM Squeeze and the most widely used variation.
How it Works
It combines two volatility indicators:
- Bollinger Bands (BB) - Measure price volatility using standard deviation.
- Keltner Channels (KC) - Measure volatility using Average True Range (ATR).
A squeeze is detected when the entire Bollinger Band moves inside the Keltner Channel, indicating unusually low volatility.
2. Low Bandwidth Range Bollinger
This screener is based on Bollinger Bandwidth.
Bandwidth Formula
Bandwidth = (Upper Band - Lower Band) ÷ Middle Band
The screener compares the current bandwidth with previous bandwidth values. If the current bandwidth is significantly narrower than recent values, it identifies the stock as being in a squeeze.
TSR Custom Screener provides several settings that allow you to fine-tune the sensitivity of this scan.
Reliability : This Setting has Highest Reliability
Low Bandwidth Range Screener Link - Click Here3. Lowest Bandwidth
This method is similar to the Low Bandwidth Range screener but uses a simpler approach.
It checks whether the current Bollinger Bandwidth is the lowest observed during the last N periods, indicating an exceptionally low-volatility environment.
4. Bandwidth Within a Percentage
Instead of calculating volatility using standard deviation, this screener measures whether the Bollinger Bandwidth falls within a fixed percentage of the 20-period Simple Moving Average (SMA).
This provides an alternative method of identifying periods of unusually low volatility.
Trading Guidelines
A squeeze only indicates that volatility is low - it does not predict the breakout direction.
For better trading results:
- Wait for a confirmed breakout before entering.
- Trade in the direction of the breakout.
- Use volume and trend confirmation whenever possible.
- Manage risk using the Middle Bollinger Band or your preferred stop-loss method.
Summary
| Screener | Reliability | Entry | Stop Loss |
|---|---|---|---|
| Bollinger + Keltner Squeeze | Medium | Breakout after squeeze release | Middle Bollinger Band |
| Low Bandwidth Range Bollinger | High | Price closes above Upper Bollinger Band | Middle Bollinger Band |
| Lowest Bandwidth | Medium | Price closes above Upper Bollinger Band | Middle Bollinger Band |
| Bandwidth Within % | Medium | Price closes above Upper Bollinger Band | Middle Bollinger Band |
Fine Tune : You can customise these screeners by clicking on 'Fine Tune Filter' Option
Caution : All these screeners are crafted based on some historical scenarios which may / may notbe applicable here. We recommend to fine tune them according to current market conditions or seek expert advise before taking any decision.