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Williams Percent R Technical Analysis and Williams Percent R Indices Trading Signals

Williams %R Technical Indices Indicator Developed by Larry Williams


Williams %R indicator is pronounced as Williams percent R indicator. Williams %R Technical Indices Indicator is a momentum oscillator used to analyze overbought and oversold levels in the Indices trading markets.


The Williams % Range oscillator is similar to the Stochastic Oscillator indicator, apart from that fact that the %R is drawn upside down on a negative scale that is from 0 to -100 and the indicator does not apply a smoothing factor.

Williams %R, Percent R Indices Indicator

Williams %R, Percent R Technical Indices Indicator - Stock Indices Technical Indicators


The Williams %R indicator analyzes the association of the closing prices relative to the High and Low range over a selected number of n candlesticks.


  • The closer the closing price of a candlestick is to the highest high of the range selected 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 selected the closer to -100 the %R reading will be.


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


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



Technical Analysis of Williams Percent R Indices Indicator


Overbought/Oversold Levels

  • Overbought- Williams %R values from 0 to -20 are considered overbought while
  • Oversold- Williams %R values from -80 to -100 are considered oversold.


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


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Trend Reversal Signals

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


Bearish Reversal Indices Trading Signal - Williams Percent Range indicator forms a peak and turns down a few days before the price trend peaks and turns down. The example shown below shows %R giving a reversal indices trading signal before indices price starts to head down and change to a down trend.

Bearish Reversal Indices Signal - Williams Percent Range Indicator

Bearish Reversal Indices Signal after Indices Uptrend


Bullish Reversal Indices Trading Signal - Williams Percent Range indicator forms a trough and turns up a few days before the price trend bottoms and turns up.

Bullish Reversal Indices Signal - Williams Percent Range Indicator

Bullish Reversal Indices Signal after Indices Downtrend

 

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