Williams Percent Range explained with pictures a powerful trading strategy

The Williams Percent Range Indicator is one of the well-known oscillators.
Its popularity is due to its wide use by analysts and its strong results in predicting price reversals, especially when combined with technical analysis.
The indicator has many uses, including identifying overbought and oversold zones, as well as detecting all types of divergences.

Components of the Indicator

The indicator consists of a moving line.

There is the -20 level, which represents the overbought zone.
And there is the -80 level, which represents the oversold zone.
When the price reaches either of these zones, whether overbought or oversold, we can expect a reversal in price movements, especially if the indicator bounces back from these levels.

How to Add the Indicator
    1. Go to the Indicators List.
    2. Select the Oscillators menu.
    3. Choose the Williams Percent Range indicator, as shown in the chart.
This will add the indicator to the chart of the currency pair selected.

How to Trade with the Indicator

As mentioned earlier, the indicator highlights strong overbought and oversold levels.
Overbought levels are identified when the price reaches -20, and oversold levels are identified when the price reaches -80.
For the best signals, it is recommended to use the indicator on higher timeframes such as the daily and 4-hour charts.
It is also very important to use the indicator in line with the overall market trend, which should first be determined on the daily timeframe.

Buy Setup

To find strong buying opportunities, first identify the trend on the daily timeframe.
The trend must be clearly upward. This can be confirmed by using the 20-period moving average: if prices are above the moving average, the general trend is bullish, and the focus should be on buy opportunities on lower timeframes.

After determining the trend, move to the 4-hour timeframe and add the indicator.
Wait for a correction and price pullback, during which the indicator also drops and reaches the -80 oversold zone.
Once the indicator and prices both rebound from this level, a buy entry can be made.
The following chart example illustrates entry points clearly.

Sell Setup

To find strong selling opportunities, first identify the trend on the daily timeframe.
The trend must be clearly downward. This can be confirmed using the 20-period moving average: if prices are below the moving average, the general trend is bearish, and the focus should be on sell opportunities on lower timeframes.

After determining the trend, move to the 4-hour timeframe and add the indicator.
Wait for a correction and price rally, during which the indicator also rises and reaches the -20 overbought zone.
Once the indicator and prices both reverse from this level, a sell entry can be made.
The following chart shows sell opportunities clearly.

Setting Targets and Stop Loss

Stop loss placement is straightforward: it should be placed at the previous swing high or swing low relative to the entry.
    • For buy trades: place the stop loss below the most recent swing low formed during the correction. This is the best location for the stop.
    • For sell trades: place the stop loss above the most recent swing high formed during the correction. This is the best location for the stop.

Targets can be set in several ways:

    • Method 1: Use two targets. The first target equals the stop loss value, and the second target is twice the stop loss value.
Example: if the stop loss is 40 pips, then target 1 = 40 pips, and target 2 = 80 pips.
    • Method 2: Use the nearest support and resistance levels as targets for the trade.