Williams Percentage Range, or Williams for short, is a momentum indicator that shows you how the end price relates to the highest and lowest prices in a given time frame.
Using this indicator, you can detect when a buy or sell saturation has occurred in a currency pair.
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This indicator is less popular than the stochastic indicator, but it is more accurate.
How to use the Williams indicator?
This indicator, as a momentary indicator, gives you an RSI-like chart because it shows you the strength of the current trend.
In the RSI chart, the midpoint (ie 50) indicates the strength of the trend; But in this indicator, traders use levels of 20 and 80 to measure the strength of the trend.
How to use the Williams indicator in the Forex market
Did you know that the Stochastic and Williams indicators use the same formula to determine the position of a currency pair?
The only difference is that Stochastic shows you this position using the lowest price in a given time frame; The Williams Indicator, on the other hand, uses the highest price to determine the closing price.
In fact, if you reverse the Williams R% line, it becomes the K% line in Stochastic.
That is why the lines in the Williams R% diagram are graded from -0 to 100 and in the stochastic diagram from 100 to 0.
Lines above -20 indicate buy saturation.
Bottom lines -80 indicate sales saturation.
Of course, buying saturation or selling saturation does not guarantee a change in trend.
Purchasing saturation means that the price is close to its highest level; Sales saturation also means that the price is close to its lowest level.
Process power detection using Williams
Williams’ sensitivity to highly volatile prices will come in handy when you want to know if prices are continuing momentum and accelerating up or down.
Determining the strength of the trend using the Williams indicator shows you whether the uptrend or downtrend will continue or not.
In the Euro / Dollar chart below, you can see that the price has tried to continue its upward trend but has not been able to reach the new price and the new Williams ceilings.
This means that in an uptrend, the price will not always reach its previous levels and may not be able to continue the trend. As shown in the chart, the pair has dropped 200 points in a week.
How to use the Williams indicator?
Immediately after this event, the price rises slightly and goes beyond the saturation range of sales.
Although the euro / dollar candlesticks on the chart are still red, they are not strong enough to push the price back to its previous levels.
Losing momentum once again?
Williams says so!
It is clear that the uptrend is intensifying and pushing the price of the dollar / euro up. The result is that in less than 30 days, the price will increase by 775 units.
This shows the accuracy of this oscillator and it is not surprising that Williams fans consider it the end of the oscillator.
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