The Williams Percent Range is quite a simple tool that compares the current market level to the ranges over a look-back period. By doing so, it. The Williams %R (or %R) is an indicator that was developed by Larry Williams, a well-known market technician. The indicator is used to identify the relationship. The Williams %R, or simply “%R”, is a momentum indicator that moves between 0 and , providing insight into the weakness or strength of a currency pair. FOREX PROFIT STRATEGIES GROUP

Check below the chart, and you will see the indicator. Now you can use it to trade. How to use the Williams' Percent Range indicator while you trade You can use the Williams' Percent Range indicator to help you spot trend reversals. But there is an important caveat regarding the timing of your entries. You might think the moment you see the line in the indicator crossing below , you should buy since conditions are oversold. Likewise, you might think that the instant the line crosses above , you should sell since conditions are overbought.

But actually, you should wait for price to pass back into the "normal" range from the overbought or oversold area before you get into a trade. When the market is trending upward, the indicator may rise above If it does, wait for it to fall again. When it crosses back below , that means to sell. When the market is trending downward, the indicator may drop below Wait for it to rise back above , and then buy. There are also a couple of ways you can use this indicator during a trend.

When the market is trending upward, the indicator may repeatedly move above When that happens, the uptrend is strong. If, during a downtrend, the indicator repeatedly crosses below , the downtrend is strong. Also: If the market repeatedly crosses above , and then fails to do so the next time it tries, upward momentum is decreasing. If the market is repeatedly crossing below , and then fails to do so the next time it tries, downward momentum is declining.

So, if you determine that the trend is still strong, you could consider trading with the trend. If you determine that the trend's momentum is decreasing, you could consider exiting and maybe even reversing your position. General tips for using the Williams' Percent Range indicator You have the basic idea now for how to use the Williams' Percent Range indicator.

Below are a few things to keep in mind as you trade: Time entries with great care. Consider a situation where price has been rising and you see it pass above You might think that if you immediately sell, you will get in on the beginning of a reversal early.

But remember, it is possible for price to hover in the overbought range for some time. It also can drop back into the normal range and rise repeatedly in the middle of an uptrend. That is why it is wise to wait until price drops down below if you want to sell. But even then, there are no guarantees. The indicator could pop right back up again while price continues to rise.

Check for confluence. One way you can frame situations like the one above with more context is by using additional indicators, drawing tools or price patterns on your charts. If you are getting the same signal from more than one, you may have a stronger setup and a better idea of what is unfolding. Test before going live. Thus, having an approach to trade ranges is crucial if you want to survive as a day trader. Timing a ranging market is not that easy to accomplish.

In consolidation, most often the profit margins are very thin. This is why you need to be able to pick up turning points with the precision of a sniper. Before we even start looking for trade signals, we first need to find a range bound market. Don't forget to read our guide on good forex trading strategies. See the Forex chart below: Note: Make sure you use 10 periods for the Williams percent range oscillator.

In his best seller book, " How I Made One Million Dollars Last Year Trading Commodities ," Larry states, "as a matter of record, it was designed to help me as it identified the tops and lows of trading range markets with explicit exactness. After identifying the range-bound market, the next step is to wait for the Williams percent range oscillator to reach extreme readings. This not only shows extreme oversold readings, but it also shows that the supply is drying out. If the momentum indicator gives accurate signals, the market should bounce.

Or, at the very least, have an attempt to rally from the oversold readings. Additionally, we also want the candle that reached reading to have a bigger trading range than the previous candles. From a technical perspective, this removes any sort of resistance once the market reverses. For our exit strategy and stop loss management , we simply work with the trading range identified during the first step. In this regard, we place the protective stop loss below the support bottom of the range and take profit at the top resistance of the range.

Step 1: Draw a line at the level on the Williams percent R indicator. The momentum strategy is developed around the level. For a visual representation, and to better and faster identify the potential trade signals, we add a line at the level.

The level is the middle of the Williams percent range oscillator range. We have also changed the oversold and overbought readings to respectively Step 2: Buy once the Oscillator moves from oversold reading and crosses the level There are two conditions that need to be satisfied before confidently buying.

We consider a market oversold if it shows a reading below the level. Secondly, we need to see the oscillator moving away from oversold territory and cross the level from beneath. This shift in momentum indicates that we can start looking for trade opportunities in the direction the oscillator crossed the level.

Conclusion — Williams Percent Range Oscillator In summary, the Williams percentage range oscillator is a great tool that can help you identify the exact low and high in any market. You can use either of the two Williams percent range strategy presented through this guide but make sure it suits the current market cycle and it suits your own personality.

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