Williams %R

Discussion in 'Technical Analysis' started by Pekelo, Feb 28, 2006.

  1. Pekelo


    I have just started to use/test this indicator. It really looks like it actually predicts market moves, meaning that several times it is actually early instead of being lagging as most indicators.

    For example yesterday it gave about 5 signals, each worked out eventually. A signals occurs when it hits zero or 100. Since it happens to be early, averaging down or up once is OK. I am not sure how it works under different market conditions, but so far it is very promising...

    Anybody with experience with it???
  2. cnms2


    What market? What time frame?
  3. Pekelo


    Well, I trade YMs, and was looking on the day chart with 5 mins.

    Today there were 3 buy signals in the first hour, but because it was in a trend, only the 3rd was a valid one. But after that it gave 3-4 another signals and played out nicely. I guess it is like the Bollinger (actually they signal pretty much at the same time), it works mostly in a sideways market....
  4. care to share some charts with us?
  5. Based on nothing other than my sincere disregard for Larry Williams and the fact that he basically hijacked George Lane's stochastic indicator by doing little more than turning it upside down and putting his own name on it, I suspect that your enthusiasm will diminish as your testing continues. Not that I hold the stochastic in high regard, but at least Lane's idea was somewhat original when he first introduced it in the 50s.

    Perhaps I'm just unduly biased against Larry. But I don't think so.

  6. I find stochastics suck for day trading, they never cross until the move is already started, and they get slaughtered in a trending market. If williams%R is just another version of this then id imagine it would be quite similar, actually I just compared it to some of the stocks I was in today and it would have gotten slaughtered.
  7. cnms2


    You have to fully understand your indicators and use them properly: adjust their parameters for the market and the time frame you're trading.
  8. Williams is the kind of guy that people either love or hate it seems.

    I read a couple of his books after I started using %R and found some pretty good success. It does have some leading characteristics which provide a nice heads up, but you can't use it standalone or it will give you plenty of false signals.

    I use it to find pivot points and give it a lot of credence when it indicates a reversal near a high or low of a trading range. Combine that with narrow range candlestick...well I have caught some nice rides.

    Though I disagree with a few things he says in his books, I still think fairly highly of him overall. Trading this way put my three kids through college. That let's me retire early....
  9. Pekelo


  10. Pekelo,

    Mmm interesting observations.

    Did you use the standard setting in the Williams %R?
    #10     Feb 28, 2006