Williams %R is a momentum oscillator developed by Larry Williams that measures the current closing price relative to the highest high over a specified lookback period. It ranges from 0 to -100, with readings above -20 indicating overbought conditions and readings below -80 indicating oversold conditions. Williams %R is closely related to the Stochastic oscillator but inverted, making it particularly responsive to price reversals.
Range: 0 to -100. Overbought: above -20. Oversold: below -80. Measures close relative to the highest high of the lookback period. Faster than Stochastic, making it ideal for timing entries. Default lookback period is 14. Failure swings (indicator reverses before reaching the opposite extreme) are strong signals.
Enter long when Williams %R rises above -80 from oversold territory with a bullish reversal candle. Buy on bullish divergence — price making a lower low while %R makes a higher low. Look for %R failure swings where the indicator fails to reach -80 during a pullback, signalling underlying strength. Enter when %R crosses above -50 (the midline) in a confirmed uptrend for momentum confirmation.
Exit longs when %R exceeds -20 and begins turning down from overbought territory. Close positions on bearish divergence — price making higher highs while %R makes lower highs. Take profits on %R failure swings at the overbought end where it fails to reach -20. Trail exits while %R remains above -50 in a trending environment.
5M, 15M, 1H, 4H
Williams %R is most effective when used for entry timing within a trend established on a higher timeframe — use the daily trend direction and %R on the 1H for precise entries. In strong trends, %R can remain overbought/oversold for extended periods; do not blindly fade these readings. Combine %R with support/resistance levels for the highest-probability reversal signals.
The Ichimoku Kinko Hyo (Ichimoku Cloud) is a comprehensive indicator system that defines support and resistance, identifies trend direction, gauges momentum, and generates trading signals — all in a single glance. Developed by Goichi Hosoda, the system consists of five lines and a shaded cloud (Kumo) that projects into the future, providing a uniquely forward-looking view of market equilibrium.
Rate of Change is a pure momentum oscillator that measures the percentage change in price over a specified number of periods. It oscillates around a zero line, with positive values indicating upward momentum and negative values indicating downward momentum. ROC is useful for identifying momentum shifts, overbought/oversold conditions, and divergences that precede price reversals.
Average True Range measures market volatility by calculating the average range of price movement over a specified period, accounting for gaps. Developed by J. Welles Wilder, ATR does not indicate direction — it quantifies how much an asset typically moves, making it essential for position sizing, stop-loss placement, and volatility-based trade management. Rising ATR indicates increasing volatility; falling ATR signals contracting volatility.
The Commodity Channel Index measures an asset's deviation from its statistical mean price, oscillating around a zero line with no fixed upper or lower bound. Originally designed for commodities by Donald Lambert, CCI is effective across all markets. Readings above +100 indicate strong bullish momentum (potential overbought), while readings below -100 signal strong bearish momentum (potential oversold).