Following on from a previous post on the Williams Percentage Range forex indicator here’s a comparison with the %R and the standard Stochastic indicators Stoch (8,3,3) simple moving average.

As you can see, the %R and Stochastic do largly the same job – but the %R is a flirty, jumpy old thing, at least on a 14 period plot.

At A it gets set off into a very odd buy signal, which wouldn’t have done any good. At the same time, B shows the %R pausing in the oversold region, while the Stochastics cross back above 20 and close to 50. As it happens, the chart stayed on level trading for some time afterwards.

I’m not convinced about using Williams %R in forex – it seems as if you’ve either got to have a gambler’s mentality with the number of signals that turn out false, compared with those good early calls – and I’ve definitely never been convinced that the successful forex trader has any of the gambler in them at all…