How to detect a trend and false signals using the Williams% R indicator

In the previous arguments, I have emphasized which can be the most significant signals to enter in purchase, or exit in sale using the Williams% R Indicator, but it is important to emphasize that in any trading strategy it is not advisable to use only one technical indicator.

Since using a single technical indicator can inevitably fill our analysis with biases, therefore, a way to filter false signals is to incorporate other technical indicators to the strategy that provide us with more data and therefore give us a better reading of the price action.

Now, one way to optimize our investments and ensure a winning technical analysis, one of the most common tactics among traders is the combination between the Williams% R Indicator and EMAs with short or long periods.

However, it would also be advisable to incorporate other trend indicators, hence, a little to exemplify how to detect a trend using the Williams% R Indicator, and how to filter false signals, I decided to incorporate in addition to the EMA, a moving average convergence / divergence or MACD for its acronym in English and the Parabolic SAR.

To project the explanation of a trend using the Williams% R Indicator filtering false signals, note in the following image that, even when the Williams% R Indicator projects upwards, both the EMA and the MACD and Parabolic SAR do not accompany that movement in the BTC price action, therefore, it is to consider this action as a false trend reversal signal.

Event contrary to the previous one, you can observe in the following image where both the EMA and the MACD and Parabolic SAR if accompanying the upward movement that reflects the Williams% R Indicator in the price action of VET. I hope you have found the information I have shared in this post to be of some use to you.

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