This strategy seeks momentum bursts by watching Williams %R relative to its historical average. When the oscillator pushes far beyond typical readings, it may signal the start of a strong move.
A long position is opened when %R climbs above the average plus Multiplier times an estimated standard deviation. A short position is taken when %R drops below the average minus the same multiplier. The trade closes once %R returns toward its average or a stop-loss is hit.
The approach caters to breakout traders who want early participation in emerging trends. Position risk is managed with a percentage stop based on the entry price.
Entry Criteria:
Long: %R > Avg + Multiplier * StdDev
Short: %R < Avg - Multiplier * StdDev
[]Long/Short: Both sides.
[]Exit Criteria:
Long: Exit when %R < Avg
Short: Exit when %R > Avg
[]Stops: Yes, percent stop-loss.
[]Default Values:
WilliamsRPeriod = 14
AvgPeriod = 20
Multiplier = 2.0m
CandleType = TimeSpan.FromMinutes(5)
[*]Filters:
Category: Breakout
Direction: Both
Indicators: Williams %R
Stops: Yes
Complexity: Intermediate
Timeframe: Intraday
Seasonality: No
Neural networks: No
Divergence: No
Risk Level: Medium