With this post I will resume my deliveries on some basic trading strategies, this time I will continue to expand information on Williams% R Indicator, mainly because this technical tool is used to detect areas of accumulation, it is intuitive that the best operating scenarios to use this technical tool, are precisely when the price action is in an area either sideways accumulation or distribution.
In consideration of what was stated in the previous paragraph, and as the case may be, if the Williams% R Indicator is above -20 and is projected to 0, it is an excellent scenario to sell, while if the Williams% R Indicator is below -80, it will be a good scenario to buy.
Overbought signal
Which would be the most advisable if the Williams% R Indicator is above -20 and projects to 0, for example; in those cases, where a financial instrument is in a constant price rebound (bullish), and if it subsequently pauses in a sideways accumulation or distribution area, the moment the Williams% R Indicator is above -20 and projects to 0, it will be an overbought signal and a probable change of trend from bullish to bearish, therefore, it can be considered as the best scenario to sell.
To project an overbought scenario, using Williams% R Indicator as a signal indicator of the likely trend change, note in the left segment of the following image; ZIL price action on sell signal near $0.20 with Williams% R Indicator above -20.
Overselling signal
Now, in those cases where a financial instrument is in constant price depreciation (bearish), and if it subsequently pauses in a sideways or accumulation area, the moment the Williams% R Indicator is below - 80, it will be an oversold signal and a probable change of trend from bearish to bullish, therefore, it can be considered as the best scenario to enter into buying.
To project an oversold scenario, using Williams% R Indicator as a signal indicator of the likely trend change, note in the right segment of the image below; ZIL price action on a buy signal near $0.05 with Williams% R Indicator below - 80.
OBSERVATION:
The cover image was designed by the author: @lupafilotaxia, incorporating image background: Source: daytradetheworld
