Williams’ Percent Range, Williams’ %R is a technical indicator which helps identify overbought or oversold conditions in the market and give divergence signals indicating a market reversal.
The indicator calculation formula is similar to the one used in the Stochastic Oscillator. Mathematically, Williams' %R is the ratio between the difference between the high and the closing price, and the «high-low» range for a certain period, multiplied by -100. Period = 14 is considered optimal, but this parameter can be adjusted depending on the instrument.
%R = (max(High(n)) — Close(t)) / (max(High(n)) — min(Low(n)))
Thus, the indicator values are in the negative zone, in the range from 0 to 100. The overbought zone is the values from 20 to 0, and the oversold zone is the values from 100 to 80. For convenience and clarity, the indicator has a value reversal function.
The indicator view in the chart.
The indicator has the following parameters:
Period - setting of the indicator calculation period.
Invert Output - display inverse values in the chart.
Panel/Moving average period - selection of the indicator location in the chart:
- New panel
Show value - display of the indicator value on the price scale on the left.
Scale/Auto-scaling - if this option is on, the scale will be automatically calculated, based on the minimum and maximum indicator values, so that the indicator would fit in the chart.
Color - color setting of the indicator.
Visual type - visual setting of the indicator display in the chart:
- Up arrow
- Down arrow
- Axis label
Line style - setting of the line display style:
- Dash - dot
- Dash - dot - dot
Width - setting of the indicator line width.
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