William Percent R Technical Analysis & William Percent R Signals

Williams %R Technical Indicator Developed by Larry Williams

Williams %R indicator is pronounced as Williams percent R indicator. Williams %R Technical Indicator is a momentum oscillator used to analyze overbought and oversold levels in the 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's from 0 to -100 & the indicator doesn't apply a smoothing factor.

Williams %R, Percent R Technical Indicator - 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 candles.

• 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 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.

William Percent R Technical Indicator

Overbought/Oversold Levels on Indicator

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

As for trading overbought/oversold levels it is best to wait for a stock indices instrument to change direction before taking a signal in the opposite direction. For Example if a stock 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 stock indices.

Trend Reversal Signals

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

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

Bearish Reversal Signal after Stock Indices Trading Uptrend

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

Bullish Reversal Signal after Trade Downtrend