Deeper Insights

This indicator is my all time favorite. I like to follow market moves closely, and the Williams %R helps me see trends, ranges, discount areas for trend moves, and risky entry areas inside ranging markets.

The first two yellow lines show structure inside of a buying move. Structure is opportunity. Knowing the highest probability move is the game. Over my trading career, I’ve noticed that a lot of entry opportunities during a running trend tend to show around the 80, 50, and 20 areas on the indicator. When trends are strong, the indicator can stay in the overbought or oversold zones longer than most traders expect.

The two yellow lines show what the market structure looked like when the indicator was around the 50 area. The only reason I know I would have been looking for a buy there is because of the volume move that happened before it. Without that volume move, the indicator reading by itself would not hold the same value for me.

Now compare the second price run to the first one. See how the steepness of the red downtrend keeps the indicator below the oversold reading? Knowing this can help you judge if you trust the zone you are trading from. It can also give you a rough idea of how long your trades should be.

For example, if I know I am entering on the third wave of a strong trend, I understand that crazy price moves, spikes, and jumps are possible. I know that can happen at any time, but from experience, I’ve found that most of the price traps in HFX happen during extended runs of price. I do not mean full reversals. I mean getting spiked out of a trade, only for price to still move in the direction you expected. Knowing that helps me decide if I want to adjust the trade or stay away from it completely. Each situation is different.

Now compare all of those moves to the last blue line move. That price run is showing a tendency of volume coming from the 50 area. Notice how I can start to find the pace of a trending move by comparing the shapes and price confirmations I see on the chart to what the Williams %R is showing me.

The advice given in the strategies Pocket Option provides is very basic. It is quick information meant to help you get started on your journey, and it should be treated that way.

If you have not picked up on this by now, everything you trade should come from some type of price confirmation. If your trades do not have good structure supporting them, then you are probably trading news or some extreme level that you are sure will not fail. I know traders who are great at finding those types of trades. That is not me. I like to prove as much as I can before I enter.

The more value you can assign to what you see in the market, the more control you have. Journal what you find, compare what you understand to what happens over the next few trading months, and watch how many aha moments you start to have.