Every trader selects the indicators they believe will yield the greatest impact. However, certain tools unjustly remain obscure due to the exaggerated popularity of some Expert Advisors. The Williams %R oscillator is a prime example of this, often overlooked by traders in favor of other indicators such as Stochastic and RSI. Overlooking this tool means missing out on its exceptional accuracy in volatile markets, an ideal condition for generating substantial profits in electronic contracts trading.
The Williams %R Oscillator is a highly effective tool that is often ignored by traders due to the popularity of other indicators such as Stochastic and RSI.
If you have overlooked Williams %R Oscillator and opted for more popular indicators for binary options trading, then you may have missed out on a lot. The Williams %R has a distinct advantage of providing highly accurate signals in volatile markets, making it an ideal tool for generating high profits in the electronic contracts market.
This article will detail the unique features and settings of the Williams %R indicator, and by the end of it, readers will be able to use the indicator with ease as it is already pre-installed in the IQ Option terminal.
More about Williams %R Oscillator
The creator of the tool can be easily deduced from its name – Larry Williams, a well-known author of various tools and strategies. Among his most successful creations is the Williams %R, which outwardly resembles other indicators such as RSI, CCI, and Stochastic with its scale, signal line, and overbought-oversold zones.
However, what sets the Williams %R oscillator apart is its unique calculation method and formula, allowing it to provide accurate signals in volatile markets. By incorporating this indicator into their trading strategy, traders can benefit from Larry Williams’ expertise and potentially improve their trading performance.
The main distinguishing factor is that the Percentage Range indicator is more responsive to market volatility, providing timely and clear signals compared to other indicators such as Stochastic.
Larry Williams recommends using a value of 14 for all timeframes, despite originally being designed for the stock market on H4 intervals. However, when trading electronic contracts, it is more suitable for lower timeframes ranging from M5 to M30.
It is also worth noting that the Williams %R oscillator can be customized to suit different trading styles and preferences. Traders can experiment with different periods and levels to find the optimal settings for their strategy.
How Williams %R is used in trading?
To use the Williams %R oscillator effectively, traders should pay attention to the indicator’s overbought and oversold zones. A signal line exiting these zones signals a trend reversal, which should guide traders in buying a contract. The key levels to monitor are 20 and 80, with the area between them typically colored to differentiate the overbought and oversold zones. In general, traders usually purchase CALL contracts when the signal line returns from the oversold zone back to the range.
Conversely, traders typically acquire PUT contracts when the signal line returns to the range from the overbought zone.
The recommended expiration is equal to the formation period of three bars.
While this indicator has a reputation for providing profitable trading without additional signals, it is important to note that it performs best in high volatility markets and not in ranging markets. Due to the frequent appearance of buy signals, traders may consider using the Martingale principle to manage risks and potentially increase profits.
In conclusion, the Williams %R oscillator is a powerful tool that can help traders identify trends and reversals in the market. While it may not be as popular as other indicators, its sensitivity to market volatility and clear signals make it a valuable addition to any trader’s toolkit. By experimenting with different settings and strategies, traders can maximize the potential of this indicator and improve their trading results.
NOTE: This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future.
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