William% R is a momentum indicator that moves between 0 and –100.
This indicator measures the overbought and oversold regions.
William % R was developed by Larry Williams and compares the closing price of a stock over a particular period of time generally 14 periods.
Let us discuss more about this indicator:
What is William% R Indicator?
William % R helps is a momentum indicator that helps in identifying overbought and oversold regions and also signals entry and exit points.
When William % R is between 0 and – 20 then the price is considered to be in the overbought zone and when the indicator is between – 80 and – 100 then the price is considered to be in the oversold zone. An overbought or oversold reading doesn’t mean the price will reverse. Overbought simply means the price is near the highs of its recent range, and oversold means the price is in the lower end of its recent range.
See also: Rate of Change (ROC)
The formula for calculating William% R is:
Wiliams %R = Highest High−Lowest Low / Highest High−Close
Highest High = Highest price in the last 14 days.
Close = Most recent closing price.
Lowest Low = Lowest price in the last 14 days.
To know more about William% R, watch the video below on StockEdge William% R Scan Tutorial:
Using William% R in StockEdge App:
We have discussed the basics of William % R, now let us discuss how to use this technical indicator to filter out stocks for trading and enhance our analytics and research skills :
In StockEdge there are many William % R scans available for filtering out stocks for trading:
Let us discuss a few of these scans:
Example 1: William% R Bullish & William% R Bearish:
William% R Bullish scan is a bullish scan which indicates that it has crossed – 80 from below and has exited the oversold zone and may move upward
Whereas William% R Bearish scan is a bearish scan which indicates that it has crossed – 20 from above has exited overbought region and may move downward.
When we click on William% R Bullish, we get a list of stocks which fulfill this criterion:
After clicking on Future Lifestyle Fashions Ltd., we get a technical chart with William% R plotted in the sub-graph:
Example 2: William% R Trending up & William% R Trending Down:
William% R Trending Up is a bullish scan which indicates that the indicator has crossed -50 from below.
When this indicator crosses – 50 from below then it indicates uptrend and when it crosses -50 from above then it indicates downtrend just like the William% R Trending Down scan.
When we click on William% R Trending Up, we get a list of stocks which fulfill this criterion:
Example 3: William% R crossed – 20 from below and William% R crossed – 80 from above:
William% R Crossed – 20 From Below is a bullish scan which indicate that this indicator has entered the overbought region and may move more upward.
William% R Crossed – 80 From Above is a bearish scan which indicate that this indicator has entered the oversold region and may move more downward.
When we click on William% R Crossed – 20 From Below, we get a list of stocks which fulfill this criterion:
After clicking on CCL Products Ltd., we get a technical chart with William% R plotted in the sub-graph
Above are examples of the William% R scans that tell you if the stock is bearish or bullish and also give us a list of the stock which fulfils the criteria of the particular day.
You can filter out the stocks and can trade accordingly using these scans.
William% R scans are one of the free tool offered by StockEdge app which you can download from here.
Interactive charts are only available for paid subscribers. You can check out our subscriber plans from here.
To have a comprehensive idea of William% R, click here.