Williams percentage range
(Williams' Percent Range,% R)
Percentage range of Williams - a technical indicator that relates to a group of oscillators. The main function of this indicator is to determine overbought / oversold conditions in the market.
% R takes negative values, so the scale is reversed. This means that if the market is oversold, the indicator value will be between 80% and 100%, if the overbought condition, probably in the range -20% and 0%.
% R, as well as all overbought / oversold indicators, requires, for confirmation signal a reversal in price in that direction. This means that if the indicator indicates that the market is overbought, then, before the open position to sell, you need to wait for a turn down the chart.
Technical Indicator Williams Percent Range is very useful, and yet unexplained ability to predict turns in price. In most cases, the formation of an indicator of the peak, as well as turn it down the line, means that in the near future pricing schedule will repeat its motion, and form the peak, down unfold. In the same way, Williams Percent Range usually creates a trough and turns up in advance.
The formula for calculating the indicator Williams' Percent Range is similar to the formula for the Stochastic Oscillator:
% R = - (MAX (HIGH (i - n)) - CLOSE (i)) / (MAX (HIGH (i - n)) - MIN (LOW (i - n))) * 100
Where:
CLOSE (i) - today's closing price;
MAX (HIGH (i - n)) - the highest high over the previous n periods;
MIN (LOW (i - n)) - the lowest low over the previous n periods.
Use the percentage range of Williams should be in flat, or very weak trend, with pre-filtering of signals that do not match the direction of the trend.
Signals:
Bullish divergence / bearish convergence - the main signal, indicating the weakness of the current trend;
in a flat market, exit from the overbought (oversold) - this is a signal to sell (buy).
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