RSI vs. William's % Which One To Use, And When?
Cryptohopper Newsletter
Bitcoin’s rebound seems to have slowed somewhat, with a correction of more than 10%. However, the price now appears to be pushing higher again and is close to this month’s high. Depending on the kind of momentum indicator you have selected, you might or might not have taken advantage of this opportunity. In this week of technical analysis, we will look at two different momentum indicators: The RSI and Williams % and see which ones are the best to use and when.
Without further due, let’s start by diving into the RSI!
RSI
The Relative Strength Index is one of the most used momentum indicators in trading. The RSI is a momentum oscillator that fluctuates between oversold and overbought. When RSI is below 30, it is generally considered to be oversold and at the right time to buy, and when it is above 70, it is usually regarded as overbought and a good time to sell. The RSI is significantly slower than William’s %, and as such, it can be used effectively on larger time frames to predict recovery from more significant market crashes. In a bullish period, though, the RSI might give minimal signals only.
Let's now look at William’s %
William’s %
William’s % is another momentum oscillator that is frequently used by traders. Just like the RSI, this indicator oscillates between oversold and overbought zones. When this indicator is below -80, it is said to be oversold, and when it is above -20, it is said to be overbought. William’s % is faster and gets into oversold or overbought zones quicker and a lot more frequently than the RSI. As such, Williams % can be used very efficiently in a bullish market as it will quickly and efficiently mark each pullback the uptrend has. However, the indicator may provide too many signals in a bearish market, thus leading to significant losses.
RSI + Williams %
In conclusion, the RSI is better used on the more extended time frames in order to identify the reversal of significant crashes, while William’s % works better in an uptrend.
What some traders do, and it should generally be avoided, is using the two indicators together to provide a buy signal. For example, using both the RSI and Williams % and then buying when they are both oversold. However, this can be very dangerous, as Williams % will show oversold each and every time the RSI does too, and as such, you are really only relying on a single indicator instead of two. With that out of the way, it is possible to use both indicators together on different time frames successfully, but we will cover this another time!
Bitcoin’s rebound seems to have slowed somewhat, with a correction of more than 10%. However, the price now appears to be pushing higher again and is close to this month’s high. Depending on the kind of momentum indicator you have selected, you might or might not have taken advantage of this opportunity. In this week of technical analysis, we will look at two different momentum indicators: The RSI and Williams % and see which ones are the best to use and when.
Without further due, let’s start by diving into the RSI!
RSI
The Relative Strength Index is one of the most used momentum indicators in trading. The RSI is a momentum oscillator that fluctuates between oversold and overbought. When RSI is below 30, it is generally considered to be oversold and at the right time to buy, and when it is above 70, it is usually regarded as overbought and a good time to sell. The RSI is significantly slower than William’s %, and as such, it can be used effectively on larger time frames to predict recovery from more significant market crashes. In a bullish period, though, the RSI might give minimal signals only.
Let's now look at William’s %
William’s %
William’s % is another momentum oscillator that is frequently used by traders. Just like the RSI, this indicator oscillates between oversold and overbought zones. When this indicator is below -80, it is said to be oversold, and when it is above -20, it is said to be overbought. William’s % is faster and gets into oversold or overbought zones quicker and a lot more frequently than the RSI. As such, Williams % can be used very efficiently in a bullish market as it will quickly and efficiently mark each pullback the uptrend has. However, the indicator may provide too many signals in a bearish market, thus leading to significant losses.
RSI + Williams %
In conclusion, the RSI is better used on the more extended time frames in order to identify the reversal of significant crashes, while William’s % works better in an uptrend.
What some traders do, and it should generally be avoided, is using the two indicators together to provide a buy signal. For example, using both the RSI and Williams % and then buying when they are both oversold. However, this can be very dangerous, as Williams % will show oversold each and every time the RSI does too, and as such, you are really only relying on a single indicator instead of two. With that out of the way, it is possible to use both indicators together on different time frames successfully, but we will cover this another time!
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