William's Percent R Analysis and William's Percent R Signals
Williams Percent R Indicator Developed by Larry William
Williams Percent R indicator is pronounced as Williams percent R indicator. William's % R Indicator is a momentum oscillator trading used to analyze and interpret overbought & over-sold levels in the markets.
The Williams Percent R oscillator trading is similar to the Stochastic, apart from that fact that the Percent R is plotted up side down on a negative scale that is from 0 to -100 & the indicator doesn't apply a smoothing out factor.
Williams Percent R, Percentage R Trading Indicator - Indicators
The Williams Percent R indicator analyzes the association of closing prices compared to the High & Low range over a chosen and selected number of n candles.
- The closer the closing price of a candlestick is to the highest high of the range selected the closer to zero the Percent R reading and value will be.
- The closer the closing price of a candlestick is to the lowest low of the range chosen the closer to -100 the Percent R value will be.
When doing technical analysis a forex trader should ignore the minus(-) sign placed before the value, e.g. -40, the - sign should be ignored, just remember indicator values are placed in an up side down manner.
- At zero: If the closing price of the candle is equivalent to the highest high of the range the William % R reading and value will be 0.
- At -100: if the closing price of the candle is equal to the lowest low of the range the Williams % R reading and value will be -100.
Analysis of William's Percent R Indicator
Over-bought/Oversold Levels in Indicator
- Overbought- William's % R values from 0 to -20 are considered and regarded over-bought while
- Oversold- Williams % R values from -80 to -100 are regarded and considered oversold.
As for over-bought over-sold levels it's best to wait for a currency pair to change direction before taking a signal in the opposite trend direction. For Example if a forex pair is oversold it's best to wait for the trend to reverse & begin to head in an upward direction before buying the forex pair.
Trend Reversal Signals
The Williams % R trading indicator used to predict a market trend reversal signal when trading a currency pair. The William Percent R indicator always predicts a reversal using the following method
Bearish Reversal Signal- Williams Percent R indicator forms a peak & turns down a couple of days before the market trend peaks & turns down. The example illustration put on display below shows Percent R giving a reversal signal before price starts and begins to head down & change to a down-trend.
Bearish Reversal Signal after an Upward Trend
Bullish Reversal Signal- William's % R trading indicator forms a trough and turns up a couple of days before the market trend bottoms and turns up.
Bullish Reversal Signal after a Downward Trend
Study More Topics and Courses:
- How to Calculate Pips Profit in Forex for 100 Pips for 1 Mini Lot
- SMA vs Exponential Moving Average EMA vs Linear Weighted Moving Average LWMA
- Bollinger Bands: Fib Ratios XAUUSD Indicator Analysis
- How to Calculate Forex Pips Value for Cent FX Account Explanation
- Average Directional Movement Index ADX MetaTrader 5 Technical Indicator
