Introduction: Unlocking the Power of the Big 3 Squeeze
Imagine having a roadmap that highlights the most explosive trading setups before they happen. A trading strategy that cuts through the noise, filtering out low-quality trades and guiding you to opportunities with the highest potential. That’s exactly what trading with the Big 3 Squeeze System is all about.
The stock market moves in cycles, and the ability to recognize these moments of compression and release is what separates struggling traders from those who consistently find high-probability setups. The Big 3 Squeeze indicator is designed to identify price compression, trend structure, and momentum—the three key factors that influence a powerful breakout. This simple yet effective indicator helps traders identify the best possible setups, ensuring that every trade is backed by solid criteria. By focusing on A+ setups, you can significantly improve your chances of success, not just in individual trades but over a series of trades. This trading strategy is not about making quick profits; it’s about building a sustainable trading strategy that can withstand the test of time.
This guide will walk you through:
What the Big 3 Squeeze is and why it matters
How to interpret key indicators like trend, structure, and momentum
The mechanics behind squeeze-based setups
How to filter for A+ trades only
Strategies to apply this system in both bullish and bearish markets
Table of Contents
I. What Is the Big 3 Squeeze?
II. How the Big 3 Squeeze Works
III. How to Identify the Best A+ Setups
IV. Fine-Tuning Entries and Exits
V. Common Mistakes Traders Make (And How to Avoid Them)
VI. Key Takeaways
VII. FAQs
What is the Big 3 Squeeze?
The Big 3 Squeeze trading strategy is designed to find periods of price compression where an asset is coiling up before a significant move. Think of it like a spring being compressed—when it releases, it moves with force.
This system revolves around three key factors:
Trend: Determines the direction of least resistance
Structure: Evaluates the underlying support and resistance dynamics
Momentum: Measures the energy fueling price action
When all three align in a squeeze setup, the potential for a high-probability trade skyrockets.
How the Big 3 Squeeze Works
The Big 3 Squeeze system incorporates multiple criteria to confirm an A+ setup:
Squeeze Histogram – Identifies price compression
Trend Indicator – Confirms the dominant market direction
Momentum Filter (MACD Line) – Determines bullish or bearish bias
Trailing Stop – Helps define risk and manage exits
Big 3 Score – A proprietary grading system ranking setups from -2 to 12
A squeeze setup occurs when volatility contracts, forming a pressure zone. The moment volatility expands, the price moves aggressively in the direction of the trend.
How to Identify the Best A+ Setups
To separate strong setups from weak ones, the Big 3 Score provides a numerical rating:
12/12 Score – The highest possible bullish setup
-2/12 Score – The strongest possible bearish setup
Neutral (Blue Label) – No clear directional bias
For a bullish A+ trade, we need:
Bullish trend
Bullish structure
Bullish momentum
Active squeeze and buy signal
Big 3 Score of 7 or higher
Price above the trailing stop
The opposite conditions apply for a bearish A+ trade.
In the chart below, MRK prints an A+ setup with bullish green labels on the Big 3 Squeeze indicator.
To learn more about the Big 3 Squeeze, visit our Support page breaking down the Big 3 Squeeze Histogram and Labels here.
Fine-Tuning Entries and Exits
Great traders don’t just find the best setups; they execute them with precision. Here’s how:
Entry: Near the 21 EMA (Exponential Moving Average)
Stop-Loss: Below the 21 EMA for long trades, above for shorts
Profit Target: Set at 3x the Average True Range (ATR)
By entering near the mean and exiting at logical profit targets, traders can keep risk under control while maximizing gains.
In the chart below, MRK is trading near the 21 EMA, which is an ideal spot to enter a trade. Also, the Big 3 Squeeze indicator identified a bull target at $134.85, which would be a target level to exit.
Common Mistakes Traders Make (And How to Avoid Them)
Even with the best tools, mistakes happen. Here are three common ones:
Trading weak setups – Always check the Big 3 Score before entering.
Ignoring momentum shifts – Pay attention to MACD and structure labels.
Overtrading – If the setup isn’t A+, walk away.
The best traders focus on quality, not quantity. Take fewer trades, but only when the setup is undeniable.
Key Takeaways
The Big 3 Squeeze is a powerful system that identifies high-probability breakout setups.
Focus on trend, structure, and momentum before taking any trade.
A+ setups should always have a Big 3 Score of 7 or better.
Entries near the 21 EMA and logical profit targets ensure risk-reward optimization.
Patience is key—only trade when conditions align perfectly.
FAQs
Q: What is the Big 3 Squeeze?
A: The Big 3 Squeeze is a modified version of the squeeze that combines trend, structure, and momentum to identify high-probability trading opportunities.
Q: What is an A+ setup?
A: An A+ setup is a high-probability trading opportunity that meets all the criteria of the Big 3 Squeeze System, including trend, structure, momentum, and squeeze.
Q: How do I use the 21 EMA in the Big 3 Squeeze System?
A: Traders use the 21 EMA (Exponential Moving Average) as a dynamic support or resistance level. Traders should aim to enter near the 21 EMA and exit if the price breaks below (for long trades) or above (for short trades) the 21 EMA.
Q: What is the ATR, and how is it used in the Big 3 Squeeze System?
A: The ATR (Average True Range) is a measure of market volatility. It is used to set realistic profit targets based on the current market conditions.
Q: What is the difference between the Big 3 Squeeze and the Squeeze indicator?
A: The Big 3 Squeeze answers the question of which way the squeeze will fire with green and red arrows. The labels help automate the process of figuring out whether or not your setup is A+. With the assistance of the bull target and bear target labels, you’ll know when you should take profits.
Q: Can the Big 3 Squeeze indicator be used for both stocks and options?
A: Yes, the Big 3 Squeeze works for stocks, options, and even futures trading.
Q: What platforms is the Big 3 Squeeze indicator available on?
A: The Big 3 Squeeze indicator is available on ThinkorSwim and TradingView.
