Blockchain and Cryptocurrency Pro - What are Failure Swings and how to define it using The Williams %R

Failure swings is a term that is common when it comes to technical analysis on a price chart and is considered as a very strong indications of a potential price reversal. When it comes to the Williams %R, failure swings is basically what occurs when the oscillator on the Williams %R indicator is in the overbought or oversold zone and also signaling that the momentum is weakening and that there is a potential reversal of the trend coming.

When the market is in an uptrend, the Williams %R oscillator enters the overbought zone and upper limit value between 0 and -20 and retraces downwards before bouncing back upwards but didn’t reach the same previous high point and retraces downwards again. This becomes a failure swing because the oscillator failed to reach the previous high point and create a high-high, indicating that the uptrend momentum is weakening and there is a potential reversal in the market coming.

On the BNB/USDT chart, the Williams %R showed the bullish failure swing. The oscillator reached an upper limit value of -5 and retraced downwards before bouncing upwards but failed to reach the previous high point. This means that the uptrend is weakening and sellers are about to take control of the market for a possible trend reversal. Price reversal followed next as the market entered a downtrend. The bullish failure swing can be a good signal for traders to sell.

When the market is in a downtrend, the Williams %R oscillator enters the oversold zone and lower limit between -80 and -100 and bounces upwards before retracing back downwards but didn’t reach the same previous low point and bounces upwards again. This becomes a failure swing because the oscillator failed to reach the previous low point and create a lower-low, indicating that the downtrend momentum is weakening and there is a potential reversal in the market coming.

On the BNB/USDT chart, the Williams %R showed the bearish failure swing. The oscillator reached a lower limit value of -97 and bounced upwards before retracing downwards but failed to reach the previous low point. This means that the downtrend is weakening and buyers are about to take control of the market for a possible trend reversal. Price reversal followed next as the market entered an uptrend. The bearish failure swing can be a good entry signal for traders to buy.