Technical indicators Williams Percent Range, often written with Williams% R or% R alone, is a popular momentum indicator. This indicator was created by Larry Williams,
a trader of commodities, stocks and forex, and was introduced in 1973.
This includes oscillator type indicator because its value fluctuates
between 0 to -100.
Williams% R is often compared with the stochastic oscillator indicator because they are very similar and differ only in scale value the opposite. If the stochastic value is 0 to +100 then the% R scale value from 0 to -100. Besides% R does not use smoothing factor (Smoothing) such as the stochastic. But like stochastic, these indicators can be applied to all trading time frame.
Williams% R indicator shows the relationship between the closing price of the range price (highest price - lowest price) at a certain time period. The main features that make it a popular indicator is the ability to predict the reversal of the direction of price (Price reversal) one or two bars before the price movements actually reversed. With indications overbought (Overbought) or oversold (Oversold), traders can anticipate a price reversal.
The concept of indicator William% R
Overbought or oversold extremes is the reading on the indicator% R, Overbought is a situation where demand is already so high that cause this indicator reached its highest limit. Overbought occurs when reading % R indicator scale reaches from 0 to -20. Instead circumstances oversold occurs when prices are already so low that this indicator shows the lowest level limit. Oversold occurs when the reading scale% R reached between -80 to -100.
In the popular Metatrader platform, this indicator can be obtained by going to Insert - Indicators - Oscillators - Williams Percent Range. Here's an example of application of the% R indicator on EUR / USD 1-hour:
Scale -20 and -80 are the default values used Larry Williams, also a period of 14. As shown in the figure above, the state of overbought occur on a scale of 0 to -20 range, which indicates a sell signal, while the condition oversold occur in the range of -80 to -100 which indicates a buy signal. If the% R is between 2 to the extreme level, which is between -21 to -79, then called a neutral state.
Momentum reversal (reversal) occurs when the% R has reached the area overbought or oversold more than once but failed to re-reach areas these extremes. This indicates weakening momentum and is a strong gesture of impending reversal in price direction in the not longer.
The divergence Like most indicators are oscillators, Williams% R can also indicate the state of divergence between the direction of price movement to the movement direction indicator. As in the example image below, the bearish divergence occurs 2 and 1 divergence bullish,
bearish divergence occurs when the bullish price movement by making price levels are higher than ever, but the indicator% R bearish, which suggests price movement will soon be bearish. Conversely when the low level lower than the previous price but a low level indicator% higher than the previous R then there is a bullish divergence that hints no longer the price will be bullish.
Williams% R is often compared with the stochastic oscillator indicator because they are very similar and differ only in scale value the opposite. If the stochastic value is 0 to +100 then the% R scale value from 0 to -100. Besides% R does not use smoothing factor (Smoothing) such as the stochastic. But like stochastic, these indicators can be applied to all trading time frame.
Williams% R indicator shows the relationship between the closing price of the range price (highest price - lowest price) at a certain time period. The main features that make it a popular indicator is the ability to predict the reversal of the direction of price (Price reversal) one or two bars before the price movements actually reversed. With indications overbought (Overbought) or oversold (Oversold), traders can anticipate a price reversal.
The concept of indicator William% R
Overbought or oversold extremes is the reading on the indicator% R, Overbought is a situation where demand is already so high that cause this indicator reached its highest limit. Overbought occurs when reading % R indicator scale reaches from 0 to -20. Instead circumstances oversold occurs when prices are already so low that this indicator shows the lowest level limit. Oversold occurs when the reading scale% R reached between -80 to -100.
In the popular Metatrader platform, this indicator can be obtained by going to Insert - Indicators - Oscillators - Williams Percent Range. Here's an example of application of the% R indicator on EUR / USD 1-hour:
Scale -20 and -80 are the default values used Larry Williams, also a period of 14. As shown in the figure above, the state of overbought occur on a scale of 0 to -20 range, which indicates a sell signal, while the condition oversold occur in the range of -80 to -100 which indicates a buy signal. If the% R is between 2 to the extreme level, which is between -21 to -79, then called a neutral state.
Momentum reversal (reversal) occurs when the% R has reached the area overbought or oversold more than once but failed to re-reach areas these extremes. This indicates weakening momentum and is a strong gesture of impending reversal in price direction in the not longer.
The divergence Like most indicators are oscillators, Williams% R can also indicate the state of divergence between the direction of price movement to the movement direction indicator. As in the example image below, the bearish divergence occurs 2 and 1 divergence bullish,
bearish divergence occurs when the bullish price movement by making price levels are higher than ever, but the indicator% R bearish, which suggests price movement will soon be bearish. Conversely when the low level lower than the previous price but a low level indicator% higher than the previous R then there is a bullish divergence that hints no longer the price will be bullish.
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