There are a lot of variables in forex trading that can affect the success of your momentum squeeze strategies. These variables include the strength of the trend and how long it takes to trade a particular asset. In the case of currency pairs, the average time to complete a momentum squeeze trade is about 30 minutes. While this period of time may seem like a long time, it is often one of the shortest periods of the entire forex trading process. A long time frame also makes it harder to see when this particular forex indicator is in a position that is at a lower price than the current price.
The best way to trade a momentum squeeze is to understand the histogram and the market s support and resistance levels. When both levels are broken, the momentum bars will diverge and make opposite moves. For example, if the TTM or BB/KC Squeeze Indicator s histogram slopes down and price breaks the zero line, it is a bearish divergence. In contrast, when the slopes of the momentum bars on the hourly and daily chart are both sloping upward, the signal is bullish.
To identify a potential squeeze condition, look for the Red and Green dots on your chart. The first green dot following the red dots signifies the "fire" of a momentum squeeze. Another indicator that can help you determine whether to buy or sell is the histogram. If the histogram is rising, it will be yellow, cyan/light blue or red, indicating a shorting opportunity. The next step in determining the best timing for a trade is to look at the Bollinger Bands and Keltner Channels.
If you have a trend scanner such as TrendSpider, look for a breakout signal or a potential momentum squeeze condition. Focus on the Zero Line, the point where the green and red dots are firing. The price of the breakout should extend to 1.272 of the swing that led to the breakout. While the indicator is a great tool to use when trading forex, it is not an indicator that should be used alone. In fact, it should be used with the vertical momentum bar if the price trend is strong enough.
The Momentum indicator has both short and long term implications for your trade management. It can be used to provide trading signals, but is often used as a confirmation tool. It can give you a simple cross over the centreline: a buy signal when the value moves from below 100 to above and a sell signal when it falls from above 100. It is a powerful tool for trading currency pairs and can be used to manage your position and your trades.
The strategy is a little more complicated than the previous two strategies, but if you can understand the basics of how to trade momentum squeeze, you ll be able to predict the direction of a currency pair before the trend moves much higher or lower. The key to trading with momentum is to watch the volatility of the currency pair as long as it remains above its zero line. If you have a long position, you can buy it at the opening price of candle B and exit it at the closing price of candle C.