Williams% R Indicator

Designed by Larry Williams, Williams% R is a dynamic indicator, which works like a stochastic oscillator. It is especially popular for measuring the levels of perekuplennosti and pereprodannosti. The scale ranges from 0 to -100 with values from 0 to -20 considered as a state of perekuplennosti and the values of-80 and -100 to be considered as a state of pereprodannosti.

Indicator Williams% R, sometimes referred to as% R, shows the attitude of the closure on the range of maximum-minimum for a specified period of time. The closer to the top of the closure of the range, the closer to zero (the higher) will be the importance of the indicator. The closer to the bottom of the closure of the range, the nearer to -100 (the lower) is the indicator value. If the closure is the maximum range of the maximum-minimum, the indicator will show 0 (the highest value). If the closure is a minimum range of the maximum-minimum, the value will be -100 (the lowest value).

Typically, Williams% R is calculated using 14 periods and can be applied to intra-day, day, week, or monthly schedule. Provisional size and number of periods may vary according to desired sensitivity and the characteristics of specific market-based instruments.

It is important to remember that the perekuplennosti not necessarily imply that it is time to sell, and consequently, the state pereprodannosti not necessarily imply a signal to buy. Market-based instruments can be found in the descending trend, to reach the state of pereprodannosti and resold to stay, as the price continues to trend down. As soon as the market becomes a tool perekuplennym or resold, traders must wait for a signal that a turnaround bid. One way might be to wait for when Williams% R crosses above or below the level of -50 to confirm a turn. Confirmation of the price spread can also be obtained using other indicators or aspects of technical analysis in conjunction with indicator Williams% R.

One method of using Williams% R indicator might be to determine the primary trend and then look for trading opportunities in the direction of the trend. With an upward trend, traders can look for value pereprodannosti to open long positions. In descending trend, traders can seek state perekuplennosti to open short positions.

Weyerhauser schedule using 14-day and 28-day Williams% R indicator illustrates some salient points:
14-day Williams% R seems like a very volatile and prone to false signals.
28-day Williams% R smooths a series of data, and the signals become less frequent and more reliable.
When the 28-day Williams% R, moved to levels perekuplennosti or pereprodannosti, he usually stayed there for an extended period of time, and the action continued to trend.
Several positive signals input filed on 28-day% R, when moving above or below the level of - 50 to confirm.

Arthur Hill
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