LEARN WILLIAMS %R IN 3 MINUTES – BLOCKCHAIN 101

In the previous course, we learned many indicators of the relationship between quantity and price, such as EMV indicators,MFI index、CMF indexAnd so on, in many volume-price relationships, it may appear that the buying volume far exceeds the demand, which leads to the price increase and the overbought phenomenon; Or the sales volume far exceeds the demand, which leads to the price drop and the phenomenon of oversold. Overbuying and overselling have a good early warning effect on the change of trading market trend, which is often regarded as an opportunity for investors to enter or leave.

History of Williams %R

Williams %R is a technical index used to measure the overbought and oversold state of the market, which was developed by Larry Williams in the 1970s. Based on the highest and lowest prices of stock prices in a certain period, it provides trading signals by calculating the relative position between the current closing price and the highest and lowest prices.

Before Williams created this indicator, investors mainly relied on traditional indicators such as price and volume for market analysis. However, he realized that these indicators could not fully capture the overbought and oversold situation in the market, so he decided to develop a new tool.

When studying the market price and fluctuation, Williams noticed that the market often changes at the key turning point of the trend. The history of Williams %R put forward by him is a relative momentum index, which provides investors with a clearer signal of overbought and oversold by measuring the relative position between the highest price and the lowest price.

The history of Williams %R has quickly become one of the key tools for investors and traders. Its simple and effective design makes it widely used in the field of market analysis, especially in short-term transactions. By observing the historical fluctuation of Williams %R, traders can identify the changes of market sentiment and make more accurate buying and selling decisions.

Practice of Williams %R

The historical value range of Williams %R is between -100 and 0, where -100 means that the current closing price is equal to the lowest price, and 0 means that the current closing price is equal to the highest price.

• The indicator is generally -20 as the overbought level;
• The indicator is generally -80 as the oversold level;
• When the history of Williams %R exceeds -20, it indicates that the market may be overheated and the price may be adjusted back.
• When the index is below -80, it indicates that the market may be too pessimistic and may usher in a price rebound.

By calling Williams %R from the SuperEx index database, you can see the complete Williams %R drawing, in which the purple area is between 20 and 80, and users can make a clear judgment.

Write it at the end

The application of Williams %R’s history usually involves looking for opportunities for overbought and oversold to help make buying and selling decisions. However, it should be noted that the history of Williams %R is a short-term indicator and may be more sensitive to short-term market fluctuations. Therefore, when traders use this indicator, they usually combine other technical analysis tools and trend confirmation to make more comprehensive decisions.