RSI's long-distance cousin... Williams %R

If RSI and Stochastic Indicators had a long-distance cousin, this would be it. But unlike the RSI or Stochastic Indicator, this one has upside down. RSI and Stochastic Indicator, both range from zero to 100 by default. This indicator, on the other hand, ranges from negative hundred to zero. This is the Williams Percent Range, no it is not created by the same Bill Williams who gave us one of the best indicators we have seen on the Trading Rush Channel. This Williams Indicator was created by Larry Williams, but is it any good? We will find that out when we test it 100 times.

The Williams Percent R, compares and shows you where the current price is relative to the highest high. By default, it will come with the length of 14, which in other words means that it will look at the highest high of the last 14 candles to calculate its value.

Since it comes from the same family as RSI and Stochastic, the Williams Percent Range value above the negative 20 is considered as overbought, and the Williams Percent Range value below negative 80 is considered as oversold. Keep in mind that these values are in negative, but since this indicator is similar to the Stochastic Indicator, it is best used in the Range Market. But if you want to have a higher probability of making money in trading, using it with a 200 period Exponential Moving Average to trade with the trend is always a good idea.

With the Williams Percent R, traders look for the Percent R line, and buy when the Percent R line crosses above the negative 80 level.

And many traders sell when the Percent R line crosses below the negative 20 level. When traders buy when the Percent R crosses above the negative 80 level, they think that the price coming out of an oversold area is an indication of decreasing sellers and increasing buyers. Similarly, traders sell when the Williams Percent R crosses below the negative 20 level, because they think that the price coming out of an overbought area is an indication of decreasing buyers and increasing sellers. That’s good and all, but you can increase the win rate of this strategy by buying and selling where the price is already heading.

In other words, when the price is above the 200 period moving average, only take buy signals when the Williams Percent R line crosses above the negative 80 level. Ignore all short signals because the price above the 200 EMA, indicates an uptrend. Set the stoploss below the recent pullback.

When the price is staying below the 200 exponential moving average, only take short signals when the Williams Percent R line crosses below the negative 20 level. Ignore all long signals because the price below the 200 EMA, indicates a downtrend. Set the stoploss above the recent pullback of the trend.

But is the Williams Percent Range Really worth trading? We will take 100 Trades with this trading strategy in the next video to find its win rate. Subscribe to see it! Thanks!