Replies to post #38230 on A.I.M. Users Bulletin Board (AIMUSERS)

[lrp42]

Hi Tom....Re: Williams%R

This indicator is always very helpful to me whenever I use it. The ChartSchool article does suggest that it should be used with other indicators:

"Like all technical indicators, it is important to use the Williams %R in conjunction with other technical analysis tools".

I like to use it with daily charts and change the default setting of 14 to a 28 day setting. I have found in doing it that way a 28 day "bigger picture" view of a particular stock or the market is presented. Also, with a 28 day setting I have found that it now closely correlates to a 50 day Simple Moving Average (SMA)...though they are not perfectly correlated.

Another thing I watch, along with the 50 day SMA and the Williams %R, is the Volume being traded. If the indicators being followed rise out of an OverSold condition and the stock price crosses above the 50 day SMA, I also like to see if Volume is also confirming the move and there is a large participation in the move higher.

Of course, using Volume as a technical indicator is very subjective. As far as I am concerned there are no set rules when using Volume as a technical indicator. I just like to watch the recent days Volume. Usually a "decline" volume day is higher than an "up" volume day because down days are more volatile, however there are exceptions to this. Personally I just like to see if the Volume being traded on any particular "up" day is as good or better than the more recent "up" volume days. If so, it suggests to me that the path to least resistance is now on the up side. However, if there is a move up and the Volume is weak then resistance could be around the corner and more thought should be given to making the trade.

In my opinion all technical analysis is subjective, but reading Volume is more subjective than other technical indicators.

The one thing which I have learned over the years is that there is no one perfect technical indicator and any technical indicator should not be used as a stand alone trigger to any trade....Buy or Sell.

Best regards,

Ray