Pathshala: Williams %R

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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjl6bCIwtaVT4sX6nob98UIdWXtDmfYkZKb3AeT8r23RIvVK-cB3ooHUhBihVcXbanTHRI4-er_ZKrHqxUp2W7y6NiJilnT7HmBtO54vKr0luM3amkwoPHPOJ6syfrHZ61UXsh0cBz3dw0/s1600/Williams.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="150" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjl6bCIwtaVT4sX6nob98UIdWXtDmfYkZKb3AeT8r23RIvVK-cB3ooHUhBihVcXbanTHRI4-er_ZKrHqxUp2W7y6NiJilnT7HmBtO54vKr0luM3amkwoPHPOJ6syfrHZ61UXsh0cBz3dw0/s200/Williams.png" width="200" /></a><b><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-large;">Williams %R</span></b></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"> <b><span style="color: #3366ff;">INTRODUCTION:</span></b><br /><br />Developed
 by Larry Williams, Williams %R is a momentum indicator that works much 
like the Stochastic Oscillator. It is especially popular for measuring 
overbought and oversold levels. The scale ranges from 0 to -100 with 
readings from 0 to -20 considered overbought, and readings from -80 to 
-100 considered oversold.<br /><br />William %R, sometimes referred to as 
%R, shows the relationship of the close relative to the high-low range 
over a set period of time. The nearer the close is to the top of the 
range, the nearer to zero (higher) the indicator will be. The nearer the
 close is to the bottom of the range, the nearer to -100 (lower) the 
indicator will be. If the close equals the high of the high-low range, 
then the indicator will show 0 (the highest reading). If the close 
equals the low of the high-low range, then the result will be -100 (the 
lowest reading).<br /><br /><b><span style="color: #3366ff;">Calculation </span></b><br /><br />%R = [(highest high over ? periods - close)/(highest high over ? periods - lowest low over ? periods)] * -100</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Williams %R is an <span style="color: blue;"><b>overbought and oversold technical indicator</b></span>
that can give easy to interpret <span style="color: blue;"><b>buy and sell signals</b></span>. Williams
%R is very similar to the Stochastic Fast indicator as the chart below will illustrate:</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Like Stochastics, the Williams %R indicator gives easily
interpreted buy and sell signals, as is demonstrated in the chart below.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: lime;">Williams %R Buy Signal</span></span></h4>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">When the Williams %R indicator is below the oversold line (20) and it rises
to cross over the 20 line, then buy.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: red;">Williams %R Sell Signal</span></span></h4>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Sell when the Williams %R indicator is above the overbought line (80) and
then falls below the 80 line.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">In addition to giving clear buy and sell signals, the Williams %R indicator
can help identify strong trends.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: small;"><span style="font-size: large;">Williams %R and Trends</span></span></h3>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">The Williams % R indicator is extremely useful and profitable during 
sideways, non-trending markets. However, during trends, the Williams % R 
indicator does not fare as well, leading to losses. Nevertheless, the Williams % 
R indicator does give tell tale signs of strong trends that can easily be 
identified by traders for profit. The following chart  illustrates Williams % R's ability to detect such trends:</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">As the chart illustrate, when the Williams % R indicator stays in 
the oversold area (below 20) and any bullish rally barely registers with the 
Williams %R (i.e. fails to go above 80), then the downtrend is strong and a 
trader should not go long the market. </span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Similarly, when the Williams %R indicator stays in the overbought area (above 
      80) and any attempt at a downturn fails to send the indicator into oversold 
      territory (i.e. fails to go below 20), then the uptrend is strong and a trader 
      should not go short.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">The Williams %R is a versatile technical indicator used by many; the 
      indicator gives easily intepreted buy and sell signals, and also informs traders 
      whether or not a market is likely overbought, oversold, or trending strongly. 
      The Stochastic indicator would 
      be a logical next step for investigation.</span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">Typically, Williams %R is calculated using 14 periods and can be used on
 intraday, daily, weekly or monthly data. The time frame and number of 
periods will likely vary according to desired sensitivity and the 
characteristics of the individual security.<br /><br />It is important to 
remember that overbought does not necessarily imply time to sell and 
oversold does not necessarily imply time to buy. A security can be in a 
downtrend, become oversold and remain oversold as the price continues to
 trend lower. Once a security becomes overbought or oversold, traders 
should wait for a signal that a price reversal has occurred. One method 
might be to wait for Williams %R to cross above or below -50 for 
confirmation. Price reversal confirmation can also be accomplished by 
using other indicators or aspects of technical analysis in conjunction 
with Williams %R.<br /><br />One method of using Williams %R might be to 
identify the underlying trend and then look for trading opportunities in
 the direction of the trend. In an uptrend, traders may look to oversold
 readings to establish long positions. In a downtrend, traders may look 
to overbought readings to establish short positions. </span></div>
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Williams %R 27. Williams %R

Williams %R INTRODUCTION: Developed by Larry Williams, Williams %R is a momentum indicator that works much like the Stochastic ...