With this post I will be resuming my publications on basic elements of cryptocurrency trading, this time I will talk about how to anticipate trend changes with the Williams% R indicator.
Bearish Divergence / Williams% R Indicator
The extraordinary thing about the Williams% R Indicator is that it provides guidance on potential changes in trends and the consequent anticipation of the next trend, because it can graphically project divergences in a given market and specific time frame.
The above would apply in a bearish divergence, if while the price action is generating higher prices than the previous ones, and if the Williams% R Indicator on the contrary reveals in its scale a second maximum lower than the one that preceded it, this element may be announcing the beginning of a bearish trend, and an evident weakness among buyers.
To project the explanation of a bearish divergence with the Williams% R Indicator, observe in the following image the behavior of the VET price action in a bullish zone, and visualize how the Williams% R Indicator follows a downtrend.
Bullish Divergence / Williams% R Indicator
In those cases, when in a financial instrument we appreciate a constant loss of prices when marking new lows, and on the contrary, the Williams% R Indicator reveals in its scale an upward trend, this element may be announcing the beginning of an upward trend, and an evident weakness among sellers.
To project the explanation of a bullish divergence with the Williams% R Indicator, observe in the following image the behavior of the BTC price action in a bearish zone, and visualize how the Williams% R Indicator follows an uptrend.
SOURCES CONSULTED
Kirkpatrick C., and Dahlquist J Technical analysis : The Complete Resource for Financial Market Technicians. Link
OBSERVATION:
The cover image was designed by the author: @lupafilotaxia, incorporating image: Source: Binance
Sometimes I keep wondering if all this works haha. I love trend but I must admit that I am not too good with it that is why I give it chance so that I don't get burnt along the line. This is the first time I am hearing about this and I wonder if I can ever learn and understand it.
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Hi @lupafilotaxia
It's amazing.the amount of indicators that exist. This one you comment is also the first time I've seen it. I don't know it, but any indicator that allows us to foresee a change of trend, gives us a possible entry, or an exit if we are already in a trade.
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Hello dear friend @lupafilotaxia, very nice explanation about this interesting indicator, I had not heard, but it would be interesting to inquire a bit about it.
So long, have a great start to the week.
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