Technical Indicator Williams percentage range `(% R) is a dynamic indicator that determines overbought or oversold market conditions. Williams `percentage range and the stochastic oscillator is very similar. The only difference is that there is an upside-down in the first degree and the Stochastic Oscillator has internal smoothing.
Indicator values ranging between 80 and 100% indicates that the market is oversold. Indicator values ranging between 0 and 20% indicate that the market is overbought. If the icon is upside down on the scale of values in general have a minus sign (eg -30%). The analysis can ignore the minus sign. All overbought / oversold indicators to obey a rule of law are, however, if the price of. For example, if an overbought / oversold indicator shows overbought condition, better wait for lower prices before the implementation of the deal to sell.
Williams large percentage indicating expected price reversal. The indicator almost always forms a peak and turns his back a few days before the price reaches a peak and go down. Thus, the range of percentages is Williams and manifests itself through a few days, prices will rise.
Calculation
TBelow is the formula of the %R indicator calculation, which is very similar to the Stochastic Oscillator formula: %R = (HIGH(i-n)-CLOSE)/(HIGH(i-n)-LOW(i-n))*100
Where:
CLOSE – is today`s closing price;
HIGH(i-n) – is the highest high over a number (n) of previous periods;
LOW(i-n) – is the lowest low over a number (n) of previous periods.
