With this post I will be resuming my publications on basic elements of cryptocurrency trading, this time I will talk about how to anticipate trend changes with the Williams% R indicator.

Bearish Divergence / Williams% R Indicator

The extraordinary thing about the Williams% R Indicator is that it provides guidance on potential changes in trends and the consequent anticipation of the next trend, because it can graphically project divergences in a given market and specific time frame.

The above would apply in a bearish divergence, if while the price action is generating higher prices than the previous ones, and if the Williams% R Indicator on the contrary reveals in its scale a second maximum lower than the one that preceded it, this element may be announcing the beginning of a bearish trend, and an evident weakness among buyers.

To project the explanation of a bearish divergence with the Williams% R Indicator, observe in the following image the behavior of the VET price action in a bullish zone, and visualize how the Williams% R Indicator follows a downtrend.

Screenshot of the BINANCE portal

Bullish Divergence / Williams% R Indicator

In those cases, when in a financial instrument we appreciate a constant loss of prices when marking new lows, and on the contrary, the Williams% R Indicator reveals in its scale an upward trend, this element may be announcing the beginning of an upward trend, and an evident weakness among sellers.

To project the explanation of a bullish divergence with the Williams% R Indicator, observe in the following image the behavior of the BTC price action in a bearish zone, and visualize how the Williams% R Indicator follows an uptrend.

Screenshot of the BINANCE portal

SOURCES CONSULTED

Kirkpatrick C., and Dahlquist J Technical analysis : The Complete Resource for Financial Market Technicians. Link

OBSERVATION:

The cover image was designed by the author: @lupafilotaxia, incorporating image: Source: Binance