What is the Williams %R?
The Williams %R is named for its developer, Larry Williams. It is a momentum indicator that is mathematically equivalent to the fast Stochastic Oscillator. The only difference is that the Williams %R is the inverse of the fast Stochastic Oscillator. It signals overbought and oversold levels based on a range of 0 to 100. From 0 to 20 the oscillator signals a sell, and from 80 to 100 the oscillator signals a buy.
Calculation: [(Today’s Close- Highest High) / (Highest High-Lowest Low) ] X 100
The highest high and the lowest low will be based on the setting selected. The Williams %R is typically set to 14 periods, so the high and the low will be taken from that period.
How to Trade Using the Williams %R
Buy when the %R reaches 100 or when 7 trading days pass since the 100 was last reached. Sell when %R reaches 0 or when 7 trading days have passed since 0 was last reached.
The Williams %R should be backtested to determine the best settings and paired with other technical indicators to verify the signals it gives.
Incoming Search Terms:
- post a comment on Stochastic indicator
- post a comment on stochastic oscillator
- edu williams % R trading
- fast Williams %R technical indicator settings for options trading
- post a comment on Oscillator indicators
- williams r technical analysis
- williams r indicator settings
- which to use williams %R or fast stocastic?
- stocks with low williams%
- best william r settings
I really appreciate your post. It gives an outstanding idea that is very helpful for all the people on the web. Thanks for sharing this information and I’ll love to read your next post too.
Regards:
Trading Tips
You make an important point… not to sell when the Williams crosses up to the overbought levels… can it can last there for a while. Let it run until it crosses down out of that area!
Exactly!
That is cool. I did not know what the %R was or how to use it. Another technical tool to use when trading. Thank you!