Smoothed WPR Indicator
MT5Also Available for MT4The Smoothed WPR indicator for MT5 detects overbought/oversold zones. Improved version of the indicator.
Description
The Smoothed WPR indicator for MetaTrader 5 is an improved version of WPR indicator which is commonly known as the William Percent Range indicator. This is an smoothed oscillating indicator suitable for identifying potential trend reversal zones in the market.
What is WPR in trading?
The WPR (William Percent Range) indicator is a trend analyzer that determines the oversold/overbought limit of financial trading assets. However, this version of the Smoothed WPR indicator is highly optimized for price smoothing, allowing it to be more sensitive to overextended price limit zones.
In addition, the indicator does not use a fixed parameter for the overbought and oversold zones, like traditional WPR. This is due to the fact that the price of an asset is very dynamic and does not always take into account fixed zones as overbought/oversold zones. Therefore, the idea is to use previous overbought/oversold zones as a guide to predict a possible trend reversal.
How to Trade with the Smoothed WPR Indicator for MT5
The image above shows how to use the Smoothed WPR indicator for MT5 to identify a potential overbought/oversold zone for a possible buy/sell entry.
The indicator line fluctuates up and down as the market moves between different zones, changing its color from green to red. Thus, the potential limit of trend exhaustion can be determined by the indicator’s previous turning point. Therefore, you can expect a possible trend reversal if the line changes color.
Also, price action/other technical indicators should be used as a confluence with the indicator before making a trading decision. For example, the sell signal in the image above was valid because the indicator line is showing a sign of a reversal in the previous overbought zone, and the price action also printed a bearish engulfing candle with several deviations, signaling a sell.
Conclusion
The Smoothed WPR indicator for MT5 approaches the market with a very flexible parameter, making it one of the best indicators for determining the limits of overbought and oversold prices.
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