Williams Percent R Analysis & Williams Percent R Trading Signals

Williams %R Indicator Developed by Larry William

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

The William % 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 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 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 examples -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.

Williams Percent R Technical Indicator

Overbought/Oversold Levels on Indicator

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

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

Trend Reversal Signals

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

Bearish Reversal Signal- Williams Percent Range indicator forms a peak and turns down a few days before the price trend peaks and turns down. The example depicted & explained below highlights %R giving a reversal stock signal before price starts to head down and change to a down trend.

Bearish Reversal Stock Trade Signal after Uptrend

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

Bullish Reversal Stock Trade Signal after Downtrend