Technical Analysis Indicators William s Percent R Rules, Scans, Adding Filters, Breakout, Retest, and Application across MTFs Course Instructor: Price Headley, CFA, CMT
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Coaching Schedule Focused Courses with Defined Goals 1 Moving Averages & Drawing Support/Resistance Lines Indicator 2 3 4 5 6 7 8 9 10 William s Percent R Acceleration Bands DMI, ADX, & DMI Difference Efficiency Ratio Commodity Channel Index (CCI) MACD & Momentum Divergence Stochastics & RSI Force Index Options Charts Indicator Indicator Indicator Indicator Indicator Indicator Indicator Indicator Options Selection Page 3
Williams %R %R is similar to Stochastics in measuring overbought & oversold levels The traditional scale is from 0 down to -100 While most use a 10 or 14 bar setting, I use a 30-bar setting It is smoother but still responsive MY GOAL: To find the Strongest Trends (Up or Down) Avoid the noise within a trading range Focus on top (or bottom) 20 percentiles Avoiding the middle 60 percentiles (20 to 80) Page 4
Percent R Bull Confirmation BULL CONFIRMATION: Look for overbought reading above -20 (at -19.50 or higher) Followed by a close above that bar s high, within the next 5 bars after Setup This is the Initial Breakout point. The bar when we get the initial overbought reading is what I call the Setup Bar. Page 5
Percent R Bull Retest BULL RETEST: Once trend is Bull Confirmed Look for a move below the overbought reading under -20 (at -20.50 or less) Use this bar s Low as the new Closing Stop This is the best Low-Risk Entry Point to get a Full Position for a bull trade. If you re not already in, or If you re only in a Half Position Page 6
Percent R Bear Confirmation BEAR CONFIRMATION: Look for over-sold reading below -80 (at -80.50 or higher) Followed by a close below that bar s low, within the next 5 bars after Setup This is the Initial Breakdown point. The bar when we get the initial oversold reading is what I call the Setup Bar. Page 7
Percent R Bear Retest BEAR RETEST: Once trend is Bear Confirmed Look for a move above the oversold reading over -80 (at -79.50 or higher) Use this bar s High as the new Closing Stop This is the best Low-Risk Entry Point to get a Full Position for a bear trade. If you re not already in, or If you re only in a Half Position Page 8
Williams %R: Trading the Extremes to Find the Major Trends Williams %R is similar to Stochastics in measuring overbought & oversold levels the traditional scale is from 0 down to -100 While most use a 10 or 14 bar setting, I use a 30-bar setting smoother but still responsive MY GOAL: To find the Strongest Trends (Up or Down) and avoid the noise within a trading range Focus on top (or bottom) 20 percentiles, while avoiding the middle 60 percentiles (20 to 80) Page 9
Williams %R: BULL CONFIRMATION BULL CONFIRMATION: Look for overbought reading above -20 (at -19.50 or higher), followed by a close above that bar s high, within the next 5 bars after Setup This is the Initial Breakout point. The first bar when we get the initial overbought reading is what I call the Setup Bar. Page 10
Williams %R: BULL RETEST BULL RETEST: Once trend is Bull Confirmed, look for a move below the overbought reading, under -20 (at -20.50 or less), and use this bar s Low as the new Closing Stop If you re not already in, or only in a Half Position, this is the best Low-Risk Entry Point to get a Full Position for a bull trade. Page 11
Williams %R: MA Overbought = BULLISH Do You Have Any Questions? Contact us at coach@bigtrends.com
Williams %R: BEAR CONFIRMATION BEAR CONFIRMATION: Look for oversold reading below -80 (at -80.50 or higher), followed by a close below that bar s low, within the next 5 bars after Setup This is the Initial Breakdown point. The first bar when we get the initial oversold reading is what I call the Setup Bar. Page 13
Williams %R: BEAR RETEST BEAR RETEST: Once trend is Bear Confirmed, look for a move above the oversold reading, over -80 (at -79.50 or higher), and use this bar s High as the new Closing Stop If you re not already in, or only in a Half Position, this is the best Low-Risk Entry Point to get a Full Position for a bear trade. Page 14
Williams %R: BSC Oversold = BEARISH Do You Have Any Questions? Contact us at coach@bigtrends.com
Williams %R: QQQQ Do You Have Any Questions? Contact us at coach@bigtrends.com
Williams %R: The Bend But Don t Break Retest Often the best signals appear to just go below the retest level for 1 bar, then Flip back above the Retest low (for bull trades) or below the Retest high (for Bear trades) While the risk can possibly be a bit higher on these trades (since you re using the same stop), it can weed out some of the bad trades too Page 17
Williams %R: Bend But Don t Break BJS Bull Do You Have Any Questions? Contact us at coach@bigtrends.com
Williams %R: Bend But Don t Break GOOG Bear Do You Have Any Questions? Contact us at coach@bigtrends.com
Williams %R: Trading the Extremes to Find the Major Trends What do we most WANT? MY GOAL: To find the Strongest Trends (Up or Down) and avoid the noise Can certain profiles help us find the BEST MOVERS? Page 20
Williams %R: SPY Do You Have Any Questions? Contact us at coach@bigtrends.com
Williams %R: 50 Level Tests at MidPoint of Trend For Example, look at Daily Retests on SPY Then I look at 60 min & 15 min to fine tune The 50 level is more of a range bound tool, but can be useful if your broader time frame is clearly bullish or bearish, and the shorter time frame bounce to 50 is likely to be Noise so fade that intraday bounce if longer indicators are bearish (or buy the dip if bullish). Page 22
Williams %R: The Bend But Don t Break Retest Often the best signals appear to just go below the retest level for 1 bar, then Flip back into the overbought or oversold territory While the risk is a bit higher on these trades (since you re using the same stop), it can weed out some of the bad trades too Page 23
Williams %R: The Retest with EMA Still intact I noticed some intraday Retests that will hold at their 5-bar Exponential Moving Average (EMA) at the close, without the EMA reversing direction These are often even more effective, just requires watching the final 5-15 minutes each day to see if the EMA held or rolled over Page 24
Williams %R: Which Filters to Use Next on Scans? After Percent R, I give the following weight: 1) Efficiency Ratio 2) Acceleration Bands 3) DMI Difference And also, keep in mind the market environment, especially when broad-based indexes are going into Bull or Bear Confirmed or Retest mode Page 25
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