How to use Williams Percent Range (Williams %R)?
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Williams %R, also referred to as the Williams Percent Range, may be a sort of momentum indicator that moves between 0 and -100 and measures overbought and oversold levels. The Williams %R could also be wont to find entry and exit points within the market. The indicator is extremely almost like the Stochastic oscillator and is employed within the same way. it had been developed by Larry Williams and it compares a stock’s price to the high-low range over a selected period, typically 14 days or periods.
The Formula for the Williams %R Is:
Wiliams %R= Highest High−Close/ Highest High−Lowest Low
Where Highest High=Highest price in the lookback period, typically 14 days.Close=Most recent closing price.
Lowest Low=Lowest price in the lookback period, typically 14 days.
The indicator is telling a trader where the present price is relative to the very best high over the last 14 periods (or whatever number of lookback periods is chosen).
When the indicator is between -20 and 0, the worth is overbought, or near the high of its recent price range. When the indicator is between -80 and -100 the worth is oversold, or faraway from the high of its recent range.
During an uptrend, traders can watch for the indicator to move below -80. When the price starts moving up, and the indicator moves back above -80, it could signal that the uptrend in price is starting again.
