Williams Percent Range Technical Analysis & Williams Percent Range Trading Signals

William %R Indicator Created by Larry Williams

William %R indicator is pronounced as William percent R trading indicator. Williams %R Indicator is a momentum oscillator trading used to analyze overbought and over-sold levels in the markets.

The Williams Percentage Range oscillator is similar to the Stochastic Oscillator, apart from that fact that the % R is drawn upside down on a negative scale that's from 0 to -100 & the trading indicator doesn't apply a smoothing factor.

William %R, Percent R Technical Stock Indicator - Indicators

The Williams %R trading indicator analyzes the association of the closing prices relative to the High and Low range over a chosen number of n candle sticks.

• The closer the closing price of a candle is to the highest high of the range chosen the closer to zero the %R reading will be.
• The closer the closing price of a candlestick is to the lowest low of the range chosen the closer to -100 the %R reading will be.

When doing technical analysis a stock indices trader should ignore the minus sign placed before the value, for example -40, the - sign should be ignored, just remember indicator values are placed in an upside down manner.

• At zero: If the closing price of the candle is equal to the highest high of the range the Williams %R reading will be 0.
• At -100: if the closing price of the candle is equal to the lowest low of the range the Williams %R reading will be -100.

William Percent Range Indicator

Overbought/Oversold Levels on Technical Indicator

• Overbought- Williams Percentage R values from Zero to -20 are considered over-bought while
• Oversold- Williams Percentage R values from -80 to -100 are considered over-sold.

As for overbought/oversold levels it is best to wait for indices to change direction before taking a signal in the opposite trend direction. For Example if indices is oversold it is best to wait for the trend to reverse and start to head in an upward direction before buying indices.

Trend Reversal Signals

The William %R indicator used to predict a trend reversal signal when trading indices. The William Percent R indicator always predict a reversal using the following method

Bearish Reversal Signal- William Percent Range trading indicator forms a peak and turns down a couple of days before the price trend peaks and turns down. The example explained and illustrated below shows %R giving a reversal signal before price starts to head down and change to a down-trend.

Bearish Reversal Indices Trade Signal after Uptrend

Bullish Reversal Signal- Williams Percentage Range trading indicator forms a trough and turns up a couple of days before the price trend bottoms & turns up.

Bullish Reversal Indices Trade Signal after Downtrend

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