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What Is the Williams Percentage Range?
Traders can rely on various types of information when making a decision about the right moment to hit or leave the market. When it comes to technical analysis, it is all about using special patterns to identify trends and further price movements. Various indicators can be used for this purpose, and Williams percent range indicator is one of them. If you are interested in trading on certain markets, the knowledge about it may help you out.
What Is Williams Percent Range?
Williams percent R is a special indicator used in trading. It can help traders determine the best time to open and close their positions. The main idea behind this method is to get insights into whether the market is overbought and oversold. This indicator comes with values ranging from 0 to -100.
When investors think that the price is going to fall, they start selling the asset. However, they may keep doing that even when it is time to buy the asset again. In this case, the term ‘oversold market’ is used.
The opposite situation applies to the overbought market. In essence, it means that investors keep purchasing the asset at a price greater than its intrinsic value. Based on Williams % R, investors can understand when the markets are oversold or overbought.
Are There Special Strategies to Use with Williams % R?
There is one simple and effective Williams percent range strategy. Traders need to purchase assets when the market is oversold and purpose assets when the market is overbought. When looking at the chart, traders can focus on the following numbers:
If the indicator falls to 80% or lower, it is time to purchase the asset.
If the indicator reaches -20% or goes higher, traders should start selling assets.
Generally, it is quite easy to understand how to use this indicator, and even beginners in the trading world will be able to learn how to do this without problems.
How to Test the Strategy?
This indicator can be activated on a variety of trading platforms. All the transactions are conducted through them. It is possible and highly recommended to test this strategy in a demo mode first. This will allow getting an understanding of the effectiveness of this indicator. If a trader starts earning a steady income with fake credits thanks to the decisions made based on Williams % R, one can switch to another mode to start earning real money.
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