The Williams Percentage Range (Williams %R or simply %R) is a technical indicator developed by Larry Williams. It measures the price level of an asset relative to the range of its highs and lows over a certain period of time. %R helps traders evaluate overbought and oversold areas to determine possible trend reversals.
How does the indicator work?
The indicator values vary from -100 to 0.
Close to -100: the asset is oversold.
Close to 0: the asset is overbought.
How to use it in trading?
1. To confirm the signals:
Use %R in combination with other indicators, such as moving averages or support and resistance levels, to confirm entry into a trade.
2. To identify overbought and oversold zones:
Values above -20: the asset is overbought (a downside reversal is possible).
Values below -80: the asset is oversold (an upward reversal is possible).
