Williams %R Mean Reversion

Entry Logic

• Long Entry: Williams %R (14) reaches -80 or below.
• Short Entry: Williams %R (14) reaches -20 or above.
• Confirmation: The indicator moves out of the overbought/oversold zone.
• Timeframe: 15-minute.
• Location: At a minor support or resistance level.
• Market Condition: Ranging.

Exit Logic

• Profit Target: The -50 level on the Williams %R.
• Scaling Out: No.
• Trailing Stop: No.
• Signal Failure: Exit if the indicator re-enters the extreme zone.
• Opposite Signal: Exit on an opposite signal.
• Time Expiration: 6-8 bars.
• Momentum Loss: Exit if momentum stalls.

Stop Loss Structure

• Hard Stop: Above/below the high/low of the signal candle.
• Soft Stop: If the indicator fails to move towards the -50 level.
• Max Dollar Loss: $250.
• Max Percent Loss: 0.5%.
• Structural Stop: Beyond a recent pivot.

Risk Management Framework

• Risk Per Trade: 0.4%.
• Daily Limit: 5 trades.
• Weekly Limit: 3%.
• Max Drawdown: 8%.
• R:R Requirement: 2:1.

Position Sizing Model

• Sizing Approach: Fixed dollar risk.
• Volatility Adjustment: No.
• Conviction Sizing: No.
• Scaling In: No.
• Scaling Out: No.

Trade Filtering

• Market Conditions: Strictly ranging markets.
• Setups: Look for the indicator to hit an extreme and reverse.
• Instruments: Forex pairs.
• Time Restrictions: None.
• Chop/News Avoidance: Yes.

Context Framework

• Trend Direction: Neutral.
• VWAP Relationship: Not applicable.
• MA Relationship: Price is likely oscillating around a flat 50 MA.
• Range Location: Near the top or bottom of a recent range.
• Higher TF Alignment: Higher timeframe should also be ranging.

Trade Management Rules

• Breakeven: No.
• Scale Out: No.
• Add Size: No.
• Fast vs Slow Moves: Works best on slower, more predictable moves.

Time Rules

• Optimal Window: Any liquid session.
• Times to Avoid: News.
• Session Notes: A classic oscillator strategy for forex.

Setup Classification

• A+ Setup: Extreme reading with divergence at a key level.
• A Setup: Extreme reading with a reversal candle.
• B Setup: Extreme reading alone.
• C Setup: Extreme reading in a trending market.

Market Selection Criteria

• Instruments: EUR/USD, USD/CHF, GBP/USD.
• Volume: High.
• Volatility: Low to moderate.

Statistical Edge Metrics

• Win Rate: 65%.
• Avg Win: 1.5R.
• Avg Loss: 1R.
• Profit Factor: 1.95.
• Expectancy: +0.325R.

Failure Conditions

• Market Conditions: A breakout from a range.
• Specific Scenarios: When the indicator stays pegged at an extreme for a long time.

Psychological Rules

• Discipline: Stick to the rules and don't get chopped up by trying to trade this in a trend.

Advanced Components

• Regime Detection: Use ADX < 20 to confirm a range.
• Filters: Combine with another oscillator for confirmation.
• Correlation: Be mindful of correlated pairs.
• MTF Alignment: Check the 60-min chart for range confirmation.

Location

• Strongest: In quiet, sleepy markets.
• Weakest: In volatile, trending markets.