How to Use Williams %R (Williams Percent Range)

You are currently viewing How to Use Williams %R (Williams Percent Range)

The Williams Percent Range is commonly known as the Williams %R. It is a momentum indicator. This shows the location of the most recent closing price in the relationship. It also shows the highest and lowest prices over a specified time period.

Williams %R is an oscillator that notifies you whether a currency pair is “overbought” or “oversold.”

Consider it a more sensitive and less popular form of Stochastic.

It has RSI-like characteristics as a momentum indicator because it evaluates the strength of a current trend.

T on the other hand, use %R‘s extreme values (-20 and -80) for clues, whereas RSI uses its mid-point figure (50) to determine trend strength.

It has RSI-like characteristics as a momentum indicator because it evaluates the strength of a current trend.

On the other hand, traders use %R’s extreme values (-20 and -80) for clues. That is to say, the RSI uses its mid-point figure (50) to gauge trend strength.

How to Use the Williams %R Indicator to Trade Forex

Did you know that Stochastic and % R employs the same algorithm to determine a currency pair’s relative location?

The only difference is that Stochastic employs the lowest price in a time span to offer you a relative location, whereas Williams % R uses the highest price to identify the closing price’s position.

In fact, inverting the %R line produces the EXACT SAME LINE as Stochastic’s % K line!
Because of this, Williams %R is scaled from 0 to -100, whereas Stochastic is scaled from 0 to 100.

A rating of more than -20 indicates that the market is overbought.

A reading of less than -80 indicates that the system is oversold.

A reading of overbought or oversold does not imply that the price will revert.

The term “overbought” refers to a price that is towards the top of its recent range.

Oversold is the same way. All “oversold” signifies the price is near the top of the market.

Determining Trend Strength  Using Williams %R

When you want to know if prices are sustaining their bullish or bearish momentum, R’s sensitivity to volatile prices comes in handy.

The pair attempted to prolong its uptrend but failed to hit new price and percent R highs, as shown in the EUR/USD daily chart below.

This indicates that prices aren’t reaching the upper end of their range as quickly as they once did, implying that the bullish momentum is fading.

In this scenario, the pair lost 200 pips in just one week!

Williams %R with EURUSD Example

The price quickly generated enough bullish momentum to push %R above its oversold levels.

However, even if the EUR/USD is still forming red candlesticks, they aren’t strong enough to bring Williams %R back to its prior lows.

Another reversal of fortune?
Certainly, Williams percent R thought so!

The bulls eventually took over and propelled EUR/USD up 775 pips in less than 30 days.

That’s some fantastic oscillation there. Williams %R is dubbed “The Ultimate Oscillator” by superfans.

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