How to Trade Binary Options with the William %R Indicator

What is William %R indicator?

Also popularly known as the Williams Percent Range, William %R Indicator is a type of oscillator used to measure the momentum of asset prices.

Its MA moves from 0 to 100 levels to show trend reversal points.

In a nutshell, the William %R indicator on Olymp Trade helps traders determine where the current high, as well as the lowest price of an asset, is. Of course in relation to its last closing price within a specified period.

Additionally, as an oscillator, William %R shows you whether an asset is overbought or oversold.

Ever heard of the Stochastic Oscillator?

Think of William %R as the less known but more sensitive kind of Stochastic Oscillator.

And as a momentum indicator, it functions like the RSI indicator. In that, it tells you the strength of an underlying trend but with one minor difference.

While the RSI indicator employs the centerline to predict the strength of a trend, traders using William %R rely on -20 and -80 as extreme levels for clues.

How does it work?

%R helps you predict the overall direction of a trend and determine the reversal points of the same.

As we have already mentioned, the William %R can move between the scale of 0 and 100.

However, points -20 and -80 are periodically used by traders to generate signals on Olymp Trade.

Typically, the -20 is located at the top, -80 to the bottom, and -50 at the center.

Now, when the indicator crosses the -20 line, it is a signal that the underlying asset is overbought because it has reached too high a level.

On the flip side, if the indicator drops and crosses the -80 level, it is an indication that the asset has reached oversold levels.

Before we move forward with further discussions, I’d love to show you how to add the William %R on Olymp Trade.

Step by step guide on how to set up William Percent Range on Olymp Trade.

Take note of this:

To perform the following steps, you need to be logged in to your Olymp Trade account. Once you have done that, follow these steps to add the William %R indicator.

1. Choose the fixed time trade and the chart type of your choice (preferably Japanese candlesticks).
2. Locate the Graphical Tool feature and click on it.
3. You will see a window pop up. Scroll down to the Oscillators tab and click on it.
4. Select the William %R.

That is how to add the William %R oscillator to your trading chart on Olymp Trade.

With that taken care of, let’s dive deep into understanding the William %R oscillator. Such that, later on, we can come up with Olymp Trade strategies using this tool.

Understanding the William %R signals on Olymp Trade

We have mentioned that the William %R oscillator is telling you how the current price action (highest and lowest points) is as compared to the highest high of the last determinable period (14 periods is commonly used).

As such, when trading on Olymp Trade and you see the William %R ranging between the -20 and 0, deduce that the price is overbought. Another way to put it is that the price is near its recent high.

Conversely, when William %R is in between the -80 and -100, it is an indication that the price is oversold, or the price is far from its recent high price level.

1. Using William %R During Uptrend on Olymp Trade.

When a market is experiencing an uptrend, you should wait for the William %R to enter the oversold zone. As the prices start moving up, wait for the indicator to change course and move up the -80. And right there, you can say the price is rising again.

2. How to Use William %R During a Downtrend on Olymp Trade.

This same principle can be used to short a market during a downtrend.

When the William %R indicator goes past the -20 line (enter the overbought zone), sit tight and wait for it to fall along with the prices past the -20. This is a signal of a downtrend continuation.

3. William %R momentum failures.

Momentum failure could be a lucrative trading opportunity on Olymp Trade.

If that is the case, how do you identify it?

Well, it is simple.

You see, commonly during an uptrend, the price of an asset will go past the -20. But when the indicator falls, it doesn’t reach the -20 level before falling again that is an indication that the price uptrend is losing momentum.

You should, therefore, brace yourself for a huge dip in price.

On the other hand, the downtrend fails when the indicator doesn’t reach the -80 level. Instead, it starts moving higher. This is your sign that the price is probably going to head up higher.

To this point, you are sure to understand what the William %R indicator is communication.

The next step is taking this ‘comprehension’ a little further.

As a trader, your main goal is to multiply the account balance by making profits. Or is it?

To help you achieve this, use the following William %R strategies to trade successfully on Olymp Trade.

How to trade with this indicator.

So far we have covered everything you need to know to trade successfully on Olymp Trade using the William %R oscillator.

For this reason, I will just highlight the most important signals you should pay attention to.

With that said, there is only one thing you should focus on at all times when using the William %R indicator on Olymp Trade:

Keeping an eye on the indicator’s movements and whether it has crossed the oversold or overbought zones. That’s all.

Spotting Buy signals with the William %R Indicator.

When the William %R runs below the -80 line, wait for the bulls to take charge, making the indicator change course and move up again past the -80, then enter a buy position.

In case you are using the 5-minute candle chart, you can hold the position for the next 30 minutes.

Spotting SELL signals with the William %R Indicator.

If you notice the indicator moving past the -20 mark, that’s a bullish trend. Therefore, wait for the bears to take back control. And the uptrend will reverse and start falling past the -20. Consider entering a short position.