Welcome back to the best trading indicators for beginners in 2020. One part five in this video. What we're going to be discussing is the ttm squeeze indicator. This is a very commonly used indicator by myself and many of the traders that have been a part of our community for so many years alongside of many investors in the world.

So we're going to run you guys through how to use this indicator. It's a very common indicator. You will most likely have it on any platform outside of thinkorswim and if you don't and you're watching this video, i do apologize so with no further ado, let's jump into the video. So the first thing that i want to talk about regarding the ttm squeeze is pretty much everything in here, so we're first, going to start with the blue and dark blue waves.

First things: first, the ttm squeeze is a momentum indicator. Okay, many of the indicators you see in the market or are using in the market are generally based around momentum, because most people want to know when things are gon na pick up and there's really no point of having an indicator. If it can't help. You understand when something is about to move, so that's generally, why most of the indicators are momentum and trying to help you find when something's gon na be ready to move, so the ttm squeeze has really five or six things.

Okay, it has baby blue dark blue. This green zero line, red zero line, red selling, wave, yellow potential buying wave all right. So now, let's go into all of those things when the market or when you see the ttm is on baby blue. The indicator from a basic standpoint is trying to tell you that the market is on the up.

Momentum is going up and things are in an uptrend and or favoring the upside direction. When the market here or the ttm turns dark blue, it's supposed to be there to help you or help you understand or suggest that the market is getting ready to turn into a bearish move. So though, it's still going up or appears to be on the up momentum is starting to shift to a more bearish move. All right now on the downside here, you'll see, dark red and you will see yellow the dark red is obviously there to suggest that you're in selling pressure and things are in a downward move and you're in sort of a downtrending move in selling pressure.

The yellow is there to indicate same thing as a dark blue, but on the downside that the selling pressure is starting to slow down and you could potentially be around the corner from having a reversal, or at least a short term. Green or bullish move opposing the current downtrending move now, and you see here in the middle, you have a green line or really it's just a line. That's made up of green dots and red dots now, ideally, when the market is showing green dots, it's saying that there really isn't a squeeze. That's in effect kind of the market is normal all right now, when you see red dots within that line, that's the ttm squeeze trying to tell you that hey there is a squeeze and effect or people who have been shorting or selling this in a short manner.

In this stock might be close to getting squeezed so whenever you're following ttm and things are going down and you think they're going to bounce and there's going to be kind of a pop squeeze move, it's really only valid if, in the event, you've been seeing red Dots and realistically, what's most important to understand about the zero line, is that when you see red dots, it's believed to be or said to be the first and or second green dot that follows after red, dots is supposed to be where the squeeze is actually triggered. So the yellow can help you understand that hey, we might be bottoming. Things might be coming up and if you notice that it's also red while you're seeing yellow and then you get a little bit of green, then it's showing hey a squeeze is an effect. That's really what the indicator is supposed to be saying, so the way that we go about using this is pretty much the way that i just explained it to you.

So let's pull this up a little bit more we're looking at the stock amc amc goes down. Does like a little mini bounce and then it goes down some more and then it just takes off into a nice bullish move. So for one. If you look at the the ttm, obviously, when it's going down it's red and then it goes into a little yellow, it has some red here and then it gets a couple green dots and we do in fact go on a really big move now.

Ttm won't necessarily help you understand how big a move is going to be, but it's there to help. You understand what momentum might actually be shifting and when a squeeze might actually be relevant. Okay, because you could be looking in a stock thinking, it's going to bottom and squeeze, but you don't really know for sure and again that ttm with the red dots and the green dots to follow is supposed to help. You understand that this is a true potential.

Squeeze that's in effect, so there's another couple, important things that we want to touch on. It's the size of the wave. Obviously, the smaller the waves are, the less relevant or less strength that that pressure has in the market. So on this move down.

This wasn't really very aggressive selling pressure today, as described by the ttm. The first down wave on the day for amc was significantly heavier selling pressure, as opposed to the second wave because again ttm. So this is also another thing that might help you understand. When trend might be changing, where you see a down, move like this, where the ttm is showing big selling and then another down move like this and there's really not a whole lot of selling.

This is almost the same concept of using the relative strength index. Where we get a move down, puts in a low. We try to go through another new low and you can see the selling pressure is way less significant on the second attempt lower, which is basically saying a momentum divergence, and then you get your red dots and then you get your pop and you get your move. So just remember the ttm doesn't really have anything to do with you, understanding how big a move is going to be, but it's there to help you when you're thinking about taking a position if you're seeing something going down and you're looking to buy a bounce.

Well, you're, probably not going to see the stock bounce if the ttm isn't even yellow right if you're trying to buy a bounce and the ttm's red. Well, it's probably going to continue going down for the time being until you start to see that shift on the ttm, at least from red, to yellow. Now also note, just because something goes from baby blue to dark blue right. So we go up and it turns kind of red it doesn't guarantee that that's going to stop the trend and doesn't mean that it can't go higher.

You can see we go from red to dark blue back to baby blue and we still get a couple of random ttm dark blues in there and it still goes up so again you can't use a ttm solely as an indicator. It's going to say hey. This is buy, sell, buy, sell, buy, sell, doesn't really work well, like that it more or less is. There is a confirmation to help you understand if you are considering taking a position.

Well, where does a ttm at least stand right now? Okay, i want to get long so you're, looking you're like oh, i think amc is going to go higher, i'm going to start buying long in this kind of move right, you're like oh. I think this is maybe like a flag or something, and you look down like ttm, that probably not probably going to go down so again, really awesome tool to have by your side so that when you're considering getting into the market, you can at least double check. What the ttm is saying before you do so to avoid buying into a top that's showing dark blue as in the selling waves, or to avoid trying to buy a falling knife. That's still showing red on the ttm all right guys with that being said that pretty much covers the part.

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