Bullish "Squeeze", What an Idea!!

Popularized by Sir John F. Carter

Key Components
1)Volatility Reduction
2)Momentum Direction

We will use LazyBear's Squeeze Momentum indicator.

(Skip to 4th tweet unecessary rant before that).

1) Volatility Reduction is Calculated with Help of Keltner Channels and Bollinger Bands(BB)

In BB, Upper and Lower Bands are formed by Standard Deviation of "averages" of Closing prices and are vulnerable to breakout on Small Price move
Keltner channel which uses (ATR) Average True Range for Upper and Lower Band is less vulnerable to false breakouts as it takes into consideration full prior moves by way of ATR rather than closing prices.
Now Coming back to the "squeeze" indicator (Squeeze Indicator by LazyBear we would use on Tradingview).

What is Bullish Squeeze?

Period When the Upper Band of BB falls & resides in Keltner's Upper Band it is called Squeeze!!
Now if you see at Bottom of Chart in above tweet there is an Indicator.

You seeing those crosses on Histogram.
That's your Holy Grail.
That's Volatility Contraction
😁

Read more about it here.
https://t.co/xO7EmqMvJC
2) Momentum Direction:
Self-explanatory chart.
How to Trade?

Trade on Bullish Bar penetrating BB Band from suqeeze area.
Also check momentum is Positive(Green Histogram).

Exits: According to RIsk.
Avoid
Stocks in Downtrend.
Sideways movement without Prior Trend.

More from All

You May Also Like

A THREAD ON @SarangSood

Decoded his way of analysis/logics for everyone to easily understand.

Have covered:
1. Analysis of volatility, how to foresee/signs.
2. Workbook
3. When to sell options
4. Diff category of days
5. How movement of option prices tell us what will happen

1. Keeps following volatility super closely.

Makes 7-8 different strategies to give him a sense of what's going on.

Whichever gives highest profit he trades in.


2. Theta falls when market moves.
Falls where market is headed towards not on our original position.


3. If you're an options seller then sell only when volatility is dropping, there is a high probability of you making the right trade and getting profit as a result

He believes in a market operator, if market mover sells volatility Sarang Sir joins him.


4. Theta decay vs Fall in vega

Sell when Vega is falling rather than for theta decay. You won't be trapped and higher probability of making profit.