How to Use Williams %R to Identify if a Crypto is Overbought or Oversold

It has been said that fundamental analysis will tell you the story, while technical analysis is what signals when to get into and out of a trade. Technical analysis will help you see the direction of the current trend, and when the market is overbought and oversold. The Williams %R is a tool that helps traders identify trend direction, and signals when to buy and sell. In this article, we’ll learn about this relatively unknown indicator, as well as four strategies to trade with it.

What Is the Williams %R Indicator?

Williams %R is a momentum indicator used in technical analysis that measures whether a crypto asset is overbought and due for a correction, or oversold and about to begin a new rally.

Williams %R, also referred to as %R or Williams Percent Range, was developed by Larry Williams and first introduced in his 1979 book, “How I Made One Million Dollars … Last Year … Trading Commodities. In 1973, the United States formally removed itself from the gold standard and inflation was high and rising. As a result, many commodities experienced strong trends, similar to the cryptocurrency trends we’re witnessing today.

When a market experiences strong trends, you want to utilize momentum indicators and tools to help you identify trading opportunities. Williams %R is a momentum indicator that generates easy-to-follow trading signals which allow traders to time their entries and exits.