Tom,
Interesting that you should mention the Williams %R. I have been using it for couple of years as a confirmation on my AIM portfolios. Of course, because I do not do this full time, my objective is to have fewer trades, but better trades.
I use three indicators to give a sort of short, medium, and long term confirmation. RSI and MACD are useful for the short and medium terms (although you may want to play around with how they are calculated based on individual preference).
As Bob G. points out, a 14 or 21 day Williams gives quite a choppy graph, with numerous trade indications. By trial and error, I stretched the Williams calculation out to 180 days, which smooths it out quite a bit. That seems to work best for my circumstances. A Williams at 0 and -100, in concert with the other indicators, seems to do a pretty good job at identifying the inflection points in prices.
So far, I have gotten fewer trades than I would have otherwise, but OTOH, it has done a pretty good job of defining the top and bottom of a trading range.
I'm still playing with this, so always interested in everybody's experiences.
Dave |
