Williams %R
- Thread starter Pekelo
- Start date
Well, I'm not dismissing myself... perhaps. I just see a whole lot of animosity on this board and others and I see no reason why?! As far as I can see there are plenty of creative ideas and I don't see why so many are so hostile?! I've made plenty of money in my relatively short career and I can tell you there is no lack of intelligence here and no lack of creativity.
Welcome to the thread, and I agree. I was surprised to see the outpour of emotions about Mr. Williams. I posted a lot before on Bollinger, he never got this kind of response. Maybe there is a history here, that we don't know. I think Thunderdog refered to it that Williams supposedly stole somebody else's work. Personally, I don't care as long as the indicator works...
As about the personal pride, I like to be contrarian, thus CAN'T is a four letter word in my vocabulary. More they say I can't, the harder I try. People like me became inventors, discoverers and pioneers...
As about why I don't care about the math formula? Why should I? If I know it, does that make me a better trader or user of the indicator? No. Using an analogy, you can teach a small child how to drive a car without him knowing anything about the engine and how that works, he still can drive just fine....
I am not a theoretical person, but a practical one. So if I see something that makes me think, "that might work", I give it a try, and see what happens, instead of overanalyzing the thingy. The pudding's test is eating it...
The funniest thing about this thread, that most naysayers didn't dare to criticize the posted charts, because they happen to be as good as they can get. If you look at that longer term chart, I would like to see another chart with clearer signals...
One valid criticism can be (and I am well aware of it) that Williams only works in sideways markets. My answers to that are:
1. That is perfectly fine with me as long as I know the limitations of the indicator.
2. The markets will move sideways for the upcoming years, so we have a winner here. The Dow made a Doji last year. That IS the deefinition of sideways...
3. In shorter terms, after a bigger move there is always a consolidation phase, thus I just have to wait for those, before I use Williams...
So all I can say to the naysayers, don't take my word for it, just give it a try. But if you want to contribute something worthy to this thread, give a valid criticism and not just the usual, "lots of people tried before and it didn't work." Lots of people tried the stockmarket too, and some made money...
Thanks Pekelo for sharing your experience on how to use Williams %R. Forget the naysayers (they are all over ET). If it works for you, that's terrific, and I say thank you for sharing your experience with it.
Yes, like all oscillators, it works best in choppy markets, and poorly in strongly trending periods. However, it seems to be an axiom that equity indices only trend about 30% of the time. Therefore, with good money management (as someone else pointed out here previously) and using the right timeframe (or even multiple timeframes for confirmation of triggrs) I can see how it can work, as simple as your method might be.
Let me ask you another straightforward question on using it in the 5 minute timeframe. Within a 5 minute bar, a lot of price movement can happen. Are you waiting for entry until a 5 minute bar CLOSES with the %R pegged against 0 or 100, or are you entering any time the %R bounces against the extreme reading within the 5 minute period?
Another question: This past Wednesday was a virtual all-day trend up (after the first hour, and a sideways period during lunch), how did your method work during this consistent trend day? Was there enough retracements along the way for you to make money with the %R hitting 100 throughout the day to make you net profitable for the day?
Yes, like all oscillators, it works best in choppy markets, and poorly in strongly trending periods. However, it seems to be an axiom that equity indices only trend about 30% of the time. Therefore, with good money management (as someone else pointed out here previously) and using the right timeframe (or even multiple timeframes for confirmation of triggrs) I can see how it can work, as simple as your method might be.
Let me ask you another straightforward question on using it in the 5 minute timeframe. Within a 5 minute bar, a lot of price movement can happen. Are you waiting for entry until a 5 minute bar CLOSES with the %R pegged against 0 or 100, or are you entering any time the %R bounces against the extreme reading within the 5 minute period?
Another question: This past Wednesday was a virtual all-day trend up (after the first hour, and a sideways period during lunch), how did your method work during this consistent trend day? Was there enough retracements along the way for you to make money with the %R hitting 100 throughout the day to make you net profitable for the day?
Bingo!
As an aside, what I find interesting is that people who are not automatic "yes men" are immediately coined as "naysayers." In this dichotomous ET world, it seems that you are either an enthusiastic supporter of whatever someone has to say, or you want them to fail because you fear their success. Apparently, some posters will have you believe that there is no middle ground of independent thinking. This is particularly curious given that the trading world is rife with bullshit. It is an environment that serves vendors well.
Against this background, I guess it comes as no surprise that people are now asking Pekelo for advice about an indicator he just started testing a short while ago which he has not actually started trading with real money, and which he openly and proudly admitted he does not even understand how it "works." And so it goes.
Another good question. I tend to wait a little, because it seems to be early a bit on several occasions. And I use it with BB, although in the testing phase I am trying to test it alone. With BB I usually wait until the candlestick changed color, thus the full 5 minutes.
One solution to the problem is to use 2 contracts (or 2 groups of contracts), thus one averaging down/up is allowed, but not more than that. So I would move in with one at the first peg against the 100/0 (if it moves my way, it is good enough) and if it goes a little more against me, another contract in the same direction.
I actually refered to this problem earlier in this thread. What happened was that the Dow rallied 60 points in 2 hours. There were 4 sell signals in that timeframe. The 1st was a clear winner dropping back by 15 points. The 2nd and 3rd were so close to each other that it came as 1 signal (because I was still in position by the time of the 3rd) and a few minutes after the 3rd it fell back to the level of the 2nd, thus there was time to get out with breakeven/small loss. Again, the exiting part is the hardest with Williams, several times it is discretionary. Anyway, I counted that 2nd and 3rd signals as one entry with a loss.
The 4th signal in that rally was actually at the top and fell back by almost 20 points, another winner.
So even in a rally phase Williams worked out profitably...
Now I looked at the NDX chart, and it had way more signals (specially at the end of that day) and not as clear as the Dow chart. This just shows that choose your trading vehicle carefully...