WPR Indicator

WPR Indicator

The WPR indicator for MT4 detects overbought/oversold zones.

The WPR indicator for MetaTrader 4 is commonly known as the William Percentage Range (WPR) indicator. It’s an oscillating indicator suitable for identifying potential trend-reversal zones in the market.

What is WPR in trading?
The WPR (William Percentage Range) indicator is a trend analyzer that detects an oversold/overbought limit of financial trading assets. However, this version of the WPR indicator is highly optimized to smooth the price, which enables it to be more sensitive to overstretched limit zones of the price.

Furthermore, the indicator doesn’t use a fixed parameter for overbought and the oversold zone like the traditional WPR. This is because the price of an asset is very dynamic and does not always respect fixed zones as overbought/oversold zones. Therefore, the idea is to use the previous overbought/oversold zones as a reference point to anticipate a possible trend reversal.

How to Trade with the WPR Indicator for MT4

The above image illustrates how to use the WPR indicator for MT4 to identify a potential overbought/oversold zone for a possible buy/sell entry.

The dodger blue line of the indicator oscillates up and down as the market trends between different zones. Thus, a potential trend exhaustion limit can be identified from the previous turning point of the indicator. Therefore, you may anticipate a possible trend reversal if the dodger blue line shows a reversal sign at the previous turning point.

Furthermore, price action/other technical indicators should be used as a confluence with the indicator before making a trade decision. For instance, the sell signal on the above image was valid because the indicator’s line shows a sign of turning at the previous overbought zone, and price action also printed a bearish engulfing candlestick with multiple rejections, signaling a sell.

Conclusion
The WPR indicator for MT4 approaches the market with a very flexible parameter, which makes it one of the best indicators for identifying the overbought and oversold limits of the price.