Williams Percent Range refers to Indicators Binary Options, Oscillators, which shows traders zone overbought and oversold asset. He was described in far 1970-th year by Williams. Not to say that it does have something special or unique. The principle of operation is similar to other oscillators. However, Williams% R indicator It may be used technical analysis with different timeframes. Perhaps that is why it became popular and loved by many traders.
Rђ RІRѕS, Williams% R a live graph:
Williams Percent Range opens in a new window below the chart. It looks like a curved line, which moves on a scale of -100 to 0.
Who should decide zone indicator:
- Of 0 to -20 (overbought zone). If the indicator hit the mark -20 top down is an option open PUT.
- From -80 to -100 (oversold zone). If the indicator hit the mark -80 from the bottom up, not open option CALL.
More should follow the divergence. This is when the price of the asset, for example, moves up showing a new high, but a curve contrary indicator begins to fall. This indicates the imminent change of trend reversal and the cost of the asset.
It is best to apply the Williams% R indicator on the flat, sideways trend.
According to statistics from more experienced traders, the Williams percentage range indicator is used on higher timeframes. Although the signals there will be less, but they will be with a higher percentage of profitability. And on the lower timeframes of 1-5 minutes, the moving average behaves erratically and unpredictably.
In the settings you can change the period setting to the desired. By default it stands on 14, this will be quite enough for newbies. According to the creator, it is this period that makes the MA more sensitive.
To compare it with the Stochastic is stupid, since they are formed according to different principles. The Stochastic Oscillator is based on moving averages, while Williams% R makes it more sensitive.
Initially, this indicator was conceived by Williams only to identify overbought and oversold zones.
Please note that when his MA comes into the zone above 80 or below 20, you should not open trades immediately. We need to wait for confirmation and the final reversal of the trend. For this you can use candlestick patterns. Remember that it is precisely due to the increased sensitivity that the indicator responds to all the chaotic price impulses.