Williams’ Percent Range (%R)
Williams’ Percent Range Technical Indicator (%R) is a simple, but efficient oscillator of the speed with which the price is moving.
How to interpret:
- Convergence/divergence. Sell if the new price high is above the previous one, while on the %R chart new high is lower than the previous one. Buy if the new price low is below the previous one, while the %R chart new low is higher than the previous one.
- Overbought/oversold conditions. If %R is between 0 and -20, the market is overbought and one should start thinking of selling. If %R is between -100 and -80, the market is oversold and one should start thinking of buying. Exit from the oversold/overbought limits can be a sign of return.
Note that it’s better to wait for the prices to confirm the trade and only then open positions.
Other articles in this section
- Relative Vigor Index (RVI)
- Force index
- Bulls/Bears Power
- Monetary policy: impact on exchange rates
- CCI (Commodity Channel Index)
- Standard deviation
- Parabolic SAR
- RSI (Relative Strength Index)
- Bollinger bands
- Moving averages
- Trend indicators
- Introduction to technical indicators
- Support and resistance
- Technical analysis
- Central Banks: policy and effects
- Fundamental factors
- Fundamental analysis
- Fundamental vs technical analysis