Williams Percent R Technical Analysis and Williams Percent R Trading Signals

Williams %R Technical Indicator Developed by Larry Williams

Williams %R indicator is pronounced as Williams percent R indicator. Williams %R Technical Commodity 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 is from 0 to -100 & the indicator does not apply a smoothing factor.

Williams %R, Percent R Technical Commodity Indicator - Indicators

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

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

Williams Percent R Technical Indicator

Oversold/Overbought Levels on Indicator

• Overbought- William % 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 commodity instrument to change direction before taking a signal in the opposite direction. For Example if a commodity instrument is oversold it is best to wait for the trend to reverse and start to head in an upward direction before buying the commodity.

Trend Reversal Trading Signals

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

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

Bearish Reversal Commodity Trade Signal after Commodity Trading Uptrend

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

Bullish Reversal Commodity Trade Signal after Commodity Trading Downtrend