LEARN WILLIAMS %R IN 3 MINUTES – BLOCKCHAIN 101 

In the previous course, we have learned a lot of volume-price relationship indicators, such as EMV indicator, MFI indicator, CMF indicator, etc. In the many volume-price relationship, there may be buying volume far exceeds the demand volume, thus bringing the price up and forming the overbought phenomenon; or selling volume far exceeds the demand volume, thus bringing the price down and forming the oversold phenomenon. The overbought and oversold have a good early warning effect on the change of the trend of the trading market, and are often regarded by investors as an opportunity to enter or leave the market.

History of Williams %R

Williams %R is a technical indicator used to measure the overbought and oversold state of the market, developed by Larry Williams in the 1970s. It is based on the high and low prices of a stock over a certain period of time and provides trading signals by calculating the relative position between the current closing price and the high and low prices.

Prior to Williams’ creation of this indicator, investors relied heavily on traditional indicators such as price and volume to analyze the market. However, he recognized that these indicators could not adequately capture overbought and oversold conditions in the market and decided to develop a new tool.

In studying market prices and volatility, Williams noticed that markets tend to change at key turning points in the trend. He came up with Williams %R’s History, a relative momentum indicator that provides investors with clearer signals that the market is overbought and oversold by measuring the relative position between the high and low prices.

Williams %R’s History is quickly becoming one of the key tools for investors and traders. Its simple yet effective design has led to its widespread use in market analysis, especially in short-term trading. By observing fluctuations in the Williams %R history, traders can recognize changes in market sentiment and make more accurate buy and sell decisions.

Williams %R Practice

The Williams %R history takes values between -100 and 0, where -100 means that the current close is equal to the minimum price and 0 means that the current close is equal to the maximum price.

• Indicators generally have -20 as an overbought level;
• Indicator generally has -80 as an oversold level;
• When the Williams %R history exceeds -20, it indicates that the market may be overheated and a price correction may occur;
• When the indicator is below -80, it indicates that the market may be overly pessimistic and a price rebound may be in the offing.

Pulling up the Williams %R from the SuperEx Indicator Library reveals the full Williams %R plot, with the purple areas showing values between 20 and 80, allowing the user to make clear judgments.

Write at the end

The application of Williams %R history usually involves finding overbought and oversold moments to assist in making buy and sell decisions. However, it is important to note that Williams %R’s History is a short-term indicator and may be more sensitive to short-term fluctuations in the market. As such, traders typically use this indicator in conjunction with other technical analysis tools and trend confirmation to make more comprehensive decisions.