Types of Williams Indicators
Types of Williams Indicators
Larry Williams created
a large number of indicators the rationale behind which is explained in his
various books and articles. With his celebrity status in the trading community,
it was not long before brokers incorporated his ideas into their own software
and trading packages, and today the Williams Percent Range indicator, for
example, is a part of the standard technical charting toolbox of just about any
broker.
Williams Percent Range
Indicator
Similar to the
Stochastics indicator, Williams Percent Range Indicator is one of the most
popular tools created by the famous trader. It is basically a volatile
oscillator the signals of which are acted upon only if they last for a
considerable period of time. Unlike the RSI, for example, one doesn't buy or
sell at overbought/oversold levels, but awaits the consolidation of the price
in these regions before any conclusion is reached.
The Williams Oscillator
is widely available as part of most forex charting packages.
Williams A/D (Accumulation, Distribution) Indicator
Larry Williams has
developed many ways of measuring the accumulation/distribution phenomenon in
the markets in light of volatility, open interest, volume, and many other
factors. These indicators are not as common as the percent range indicator, but
they are popular and highly regarded by traders.
Williams Ultimate
Oscillator
The Ultimate oscillator
was created for the purpose of reducing the effect of short-term large
movements on the signals generated. The indicator measures
accumulation/distribution in the market, instead of focusing on the price
directly, and can also be configured to fluctuate in accordance with three
different time cycles corresponding to 7, 14, and 28-period measurements.
The indicator is used
on the basis of divergence/convergences, and a signal is confirmed with a trend
break, which is a gap in the price
indicating that the momentum of the price action has changed decisively.
Positions are opened on the basis of highs or lows registered on the
oscillator.
Greatest Swing Value
Indicator
This is not so much as
an indicator as it is a concept introduced by Larry Williams in one of his
books. Used with simple bar charts, or in more complicated configurations, the
Greatest Swing Value concept is used by swing and range traders for
establishing trade patterns.
Blast Off Indicator
This indicator is not
very common, since it is a proprietary tool, but Larry Williams will not
hesitate to talk about it during his appearances in meetings or seminaries with
other traders.
Conclusion
Needless to say,
Williams indicators are very popular in the trading community. The trading
record of the creator of these tools is enough in itself, for many people, to
justify their use. Nonetheless, anyone who regards these tools as charmed items
that will protect their users from error is likely to be disappointed in short
order. As with any indicator, using the Williams indicators requires, above
all, a reasonable degree of skepticism about their effectiveness. No indicator
will eliminate the necessity of a diligent and focused approach to risk
management. These tools are no exception.
In this group, the most
popular ones are the Williams Percent Range indicator and the Ultimate
Oscillator. Although we're going to examine both of them in greater detail in a
separate article, we may note here that as
trend indicators that are volatile themselves, and will generate good
results only if the signals emitted by them are used with great conservatism.
In other words, pick the most convincing, and long-lasting signals, as you'll
have plenty of them to act upon in any case. It is possible to do very well
with these great indicators when one treats risk sensibly and does not get
carried away by his successes, or allow his failures to chop off a large chunk
of his account by trading too much.