William's percentage range is a momentum oscillator indicator.
Being a momentum oscillator indicator,Williams' percentage range trading indicator was created by Larry Williams with the main objective of helping traders to know whether the market has experienced an overbought or oversold condition.As a momentum indicator, Williams' percentage range indicator moves between 0 and -100 . At above -20,that will be an indication of an overbought market condition while at below -80 that will be an indication of an oversold market condition.
According to Larry William's, Williams' percentage range indicator is calculated using the following formula;
%R= Highest High price- Close price/Highest High price-Lowest Low price
1.oversold cryptocurrency market
Therefore, Since Williams' percentage range is an oscillator indicator and ranges between 0 to -100,it follows to have its oscillation at between -20 to -80.When the percentage range is below -80 then it is an indication that the market is in an oversold condition thus signalling the cryptocurrency trader to buy a given amount of a certain cryptocurrency in terms of USDT if their account balance is in USDT. The cryptocurrency trader can either place a market buy order which will be executed instantly or they can place a limit buy order which will be executed when the market price reaches their limit buy order.This is indicated as from the candlesticks chart below;
The candlestick chart above represents the price analysis of TRX in terms of USDT. From the price analysis,there are two points,point A and point B. Point A is the william's percentage range while point B represent the oversold point. At point B, the william's percentage range has fallen below -80 thus signaling the cryptocurrency trader of an oversold market condition at that point. The cryptocurrency trader should buy a given amount of TRX with their USDT balance. The cryptocurrency trader will use a market buy order or a limit buy order. When their buy order is being executed,they will receive the amount of TRX bought to their account.When the price of TRX starts to increase,then their account will also start to increase in value.
2. overbought cryptocurrency market
Thereforesince Williams' percentage range is an oscillator indicator and ranges between 0 to -100,it follows to have its oscillation at between -20 to -80.When the percentage range is above -20 that will be an indication of an overbought market condition thus the cryptocurrency trader will be signalled to sell the previously amount of cryptocurrency bought that is currently holding to avoid making their cryptocurrency trading account to decline in value. The cryptocurrency trader can either place a market sell order which will be executed instantly or they can place a sell limit order which will be executed when the market triggers their sell limit order. This is indicated as from the candlesticks chart below;
The above is a market for TRX against USDT. Two points are indicated,point A and point B. Point A is the william's percentage range while point B is the overbought point. At point B,the william's percentage range has risen above -20 thus an indication of an overbought market over there. This signals the cryptocurrency trader to sell the previously bought TRX to avoid making their account to start declining in value. The cryptocurrency trader can place a market sell order or a limit sell order. When their order is being placed, their account will increase in value in terms of USDT.
Recommendation: cryptocurrencies are highly volatile market. When placing a buy order,always make sure to apply risk management so that your account can be safer incase the market goes against you on your buy order placement.
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