Williams Percent RangeThe Williams’ Percent Range (%R) indicator shows when the market is overbought or oversold. It’s similar to the Stochastic Oscillator, except for the following:
- The Williams’ Percent Range has an inverted scale – ignore this when doing analysis
- The Stochastic Oscillator has internal smoothing
- The market is oversold when the indicator is between 80% and 100%
- The market is overbought when the indicator is between 0% and 20%
When the indicator shows the market is overbought or oversold, you should still wait for the price to reverse before trading.
The Williams Percent Range indicator has an uncanny ability to anticipate price reversals; it usually hits a high or low a few days before the price does.
To determine %R, calculate the difference between the highest high seen previously and the current close. Then, divide the result by the difference between the highest high and the lowest low.
%R = ( HIGH( N ) – CLOSE ) / ( HIGH( N ) – LOW(N ) ) * 100
CLOSE is the current closing price
HIGH( N ) is the highest high in the last N intervals
LOW( N ) is the lowest low in the last N intervals
You can find more information about technical indicators in the MetaTrader 4 User Guide. Select Help > Help Topics > Analytics > Technical Indicators.