Williams Range indicator


Williams Percent Range indicator (WPR indicator)

#Forex indicators , #Forex strategies , #Technical analysis

Williams% R indicator, Williams Percent Range indicator Williams percentage range indicator – part of the technical analysis related to oscillators. Designed by Larry Williams in 1973. Williams Percent Range on the one hand is not complicated, but on the other is very effective useful, showing the speed of price changes for trading instruments. It displays on its chart the ratio of the current price to the price range for the previous period.

The Williams% R indicator is a movement indicator, which in its essence resembles a Stochastic oscillator very much. The difference between them is that Stochastic estimates open and close prices relative to each other, and the Williams Percent Range uses only one of them and compares it with its range for the period. Williams Percent Range works great when trading in channels, for example. Therefore, when a trader is faced with the task of assessing overbought or oversold trading instruments – Williams% R is one of the first in the list of assistants in solving this problem.

Formula Williams% R:

% R = – (MAX (HIGH (in)) – CLOSE (i)) / (MAX (HIGH (in)) – MIN (LOW (in))) * 100

Where:

HIGH – maximum extreme for the period

LOW – minimum extremum for the period

CLOSE – closing price

The author recommends using period 14 during work. In his opinion, this is the most optimal setting for trading. As always, there can only be one recommendation – listen to the author. Williams% R, Williams Percent Range has a remarkable property – this indicator often shows a possible reversal in advance, that is, it is a leading indicator. So, since this is so, then it’s worth using the author’s settings, otherwise there is a risk of losing the indicator’s efficiency.

According to the Williams Percent Range (Williams% R, Williams Percent Range), you can trade on any timeframes from minutes and above.

How the WPR indicator works

We know that the current price of any trading instrument is a balance of supply and demand at a certain point in time. If we consider not one price (a point on the chart), but a price range (several points), then we can state the following – the maximum extreme of the range, this is the point where the strength of buyers (bulls) was at the highest point, and the minimum extreme range is the point where the strength of sellers (bears) was at its highest point. Moreover, the most significant indicator of the range in question is its final price, that is, the closing price. At this point, the current balance of forces has finally formed, so to speak. Here it is shown whether the bulls or bears eventually won and how grand or not so grand.

So, if the final point of the range is far from the maximum, but the trend is growing, this indicates that the bulls are losing strength and a reversal is possible, that is, you need to sell. And when the bears cannot “break through” their extreme on a falling trend, it means they have lost strength and a reversal is also possible and it is time to buy. Hence the indicator signals:

1. If close is near the maximum extremum, then Williams% R is in the zero zone;

2. If close is near the minimum extreme, then Williams% R is in the -100 zone.

Adding the Williams Range indicator to MT

Williams Percent Range (Williams% R, Williams Percent Range) is standard on MT4 and MT5 trading platforms. To add it to the chart of the trading instrument, open the “Insert / Indicators /” menu .

Option to add Williams Percent Range (Williams% R, Williams Percent Range) No. 2

Launch MT. By default, the Navigator window is open on the desktop. Select Williams% R, Williams Percent Range in it, as shown in the figure and drag it onto the chart of the trading instrument.

WPR Indicator Parameters

Williams Percent Range (Williams% R, Williams Percent Range)

You can only configure the period in the indicator, you may need to make the indicator more sensitive on your preferred time frames. Then put a lower value. But as mentioned above, this is not worth doing, according to the author.

Trading system

You can trade on the Williams Percent Range (Williams% R, Williams Percent Range) as on any oscillator.

1. Analysis of divergence (the most reliable way);

2. Analysis of overbought and oversold zones (sell when the indicator line breaks the level of -20 from top to bottom, buy when the indicator line breaks through the level of -80 from bottom to top).

Let’s analyze the trading tactics for divergences:

Transaction for sale:

1. The indicator line and the chart of the trading instrument formed a divergence, we sell at the opening of the next candle after the signal;

2. Set Stop Loss 3-6 points above the previous extreme;

3. Close the deal when the indicator line breaks the level of -80 from the bottom up.

For a purchase transaction, the reverse is true.

A few simple rules in conclusion

Remember, there are no indicators on Forex that are not mistaken. Williams Percent Range (Williams% R, Williams Percent Range), like any other, requires confirmation of their signals. When building your own trading system, use several indicators.

Follow Mani Management. Never in one transaction risk more than 2 percent of your capital. This approach will protect you from ruin and allow you to consistently make money on Forex using the Williams Percent Range (Williams% R, Williams Percent Range).

Follow your trading strategy clearly. If according to the strategy of the Williams Percent Range (Williams% R, Williams Percent Range) you need to open a deal – open it, if you fix the result – fix it, and it does not matter if you are in the black. Only following the rules of Williams% R, Williams Percent Range “from and to” will allow you to earn.

The Williams Percent Range indicator for MT4 can be downloaded here

> Williams Percent Range indicator for MT5 can be downloaded here

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