DB MACD TTM SQZ Histogram

2022년 8월 8일

DB MACD TTM SQZ Histogram

What does the indicator do?

The DB MACD TTM SQZ Histogram combines the MACD with the TTM Squeeze into a single histogram. Traders may use the "Multiplier" settings to weight MACD vs. TTM SQZ. The MACD will default have a multiplier value of 2 vs. 1 for TTM SQZ. The reasoning behind the default 2:1 multiplier is to allow the faster MACD to have a strong hand in the histogram. In addition to the histogram, the indicator will display a red dot when a BB/KC squeeze (TTM SQZ) is present. The TTM SQZ uses a length of 20, BB m-factor of 2, and KC m-factor of 1.5 to match the "Mastering the Trade" squeeze. The histogram is calculated by taking the MACD histogram and the TTM SQZ histogram and first standardizing them into reasonable decimal percentages. Once standardized, each decimal percentage is then multiplied by the individual multiplier. Finally, the two values are summed into the combined histogram value. The end result is a standardized weighted combination of the MACD (faster) with the TTM SQZ (slower) histogram.

How should this indicator be used?

The DB ETHUSD MMA Indicator should be combined with other indicators as a secondary visual indicator or market buy/sell periods. The indicator is not meant to replace the MACD or TTM SQZ. Analyzing the MACD and TTM SQZ wave patterns individually is extremely useful. The indicator allows the trader to quickly obtain a combined analysis of the two indicators with a predetermined preference (multiplier) towards one vs. the other.

In other words, the indicator is very helpful when the MACD and TTM SQZ are conflicting in providing market direction. Those familiar with MACD or TTM SQZ histograms recognize there are four periods in the full cycle; growing below zero line, growing above zero line, falling above zero line, and falling below zero line. Typically a trader would look for buying opportunities when the cycle is showing "growing below zero line." and sell when the price reaches the "falling above zero line." The qualification of the wave pattern of the four periods must be reviewed before trades. If the wave is choppy, then alternative timeframes should be reviewed. Think of wake on a lake or ocean waves. Choppy is unpredictable but smooth waves are more predictable.

The red dot on the zero line would indicate that a squeeze is present in the current timeframe, building pressure. The red dot does not indicate a pressure release of up or down. Instead, it simply means the spring is being compressed. When a squeeze is present, pressure builds and may release in either direction. You can combine this indicator with BB and KC on the plot with BB (20 len, 2 m-factor) and KC (20 len, 1.5 m-factor). You can review the BB/KC outer bands to see possible breakout resistance or support when a squeeze is on. If the price is outside the BB/KC outer banks, move to a higher timeframe.

Does the indicator include any alerts?

Not Yet. Perhaps in the Future (If Desired)

Enjoy!