As they do, the width of the Bollinger Bands contracts. This is what is called a “squeeze.” A squeeze happens when the Bollinger Bands (upper and lower Bollinger Bands) come closer together. When the stock market is trading in a tight range, the Bollinger Bands will narrow and contract. How does the squeeze momentum indicator work? When this happens, it is an indication that a period of high volatility may be about to occur. This is represented by a decrease in the distance between the blue line and the red line on the Squeeze Momentum Indicator. When the market is in a period of low volatility, the Bollinger Bands will contract and move closer together. The blue line represents the Bollinger Bands, while the red line represents the Keltner Channel. The Squeeze Momentum Indicator consists of two parts: the blue line and the red line. The indicator is based on the Bollinger Bands and Keltner Channel indicators. The Squeeze Momentum Indicator is a technical indicator used to identify periods of low volatility in the market, which are often followed by periods of high volatility. Get ready to take your trading game up a notch with this must-know indicator! What is the squeeze momentum indicator? In this post, we’ll dive into what the squeeze momentum indicator is, how it works, and how you can use it to improve your trading strategy. This powerful tool combines Bollinger Bands, Keltner Channels, and momentum indicators to highlight potential trading opportunities. How to use the squeeze momentum indicator?Īre you tired of endlessly scrolling through charts and guessing when to enter or exit a trade? The solution may lie in the squeeze momentum indicator.What are the benefits of using the squeeze momentum indicator?.
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