Williams Percent Range
- Average True Range ATR
- Bollinger Bands
- Commodity Channel Index (CCI)
- DeMark Indicator
- Envelopes Indicator
- Force Index FRC
- Momentum Indicator
- Relative Vigor Index (RVI)
- Relative Strength Index (RSI)
- Williams Percent Range
Williams Percent Range (%R) Indicator Purpose
Williams Percent Range (%R) is a forceful technical indicator developed by Larry Williams which determines whether the market is overbought or oversold. %R is associated to the Stochastic Oscillator. There is only one difference between them that % R has an upside down scale and the Stochastic Oscillator has internal smoothing.
Williams Percent Range (%R) Indicator Usage
If the WPR’s value lies between -80% - -100%, the market is at oversold level. So, it is reasonable to open BUY positions. If the WPR’s value lies between -0% - -20 %, the market is overbought. When the value of the WPR falls below -20, it is logical to open SELL positions.
%R divergence patterns are unusual, but may indicate possible trend weakness:
- If the market price increases to a new high, but the WPR indicator does not, so that may be a signal of the uptrend weakness.
- If the market price drops to a new low, but the WPR indicator does not, so that may be a signal of the downtrend weakness.
Williams’ %R indicator has one important parameter, namely N, which specifies the amount of periods over which the price range should be considered.
Williams Percent Range (%R) Indicator Calculation
%R technical indicator is defined by the following formula:
R% = - ((H - C)/ (H – L)) x 100,
C – latest close price;
L – the lowest price over a given period;
H – the highest price over a given period.