- Williams %R Defined
- Williams %R and Determining Trend Strength
Williams %R is an overbought and oversold technical indicator that may offer potential buy and sell signals. Williams %R is very similar to the Stochastic Fast indicator (see: Stochastics) as the chart below will illustrate:
Like Stochastics, the Williams %R indicator attempts to give buy and sell signals, as is demonstrated in the chart below of the Nasdaq 100 exchange-traded fund QQQQ:
Williams %R Potential Buy Signal
When the Williams %R indicator is below the oversold line (20) and it rises to cross over the 20 line, then a trader might buy.
Williams %R Potential Sell Signal
A trader might sell when the Williams %R indicator is above the overbought line (80) and then falls below the 80 line.
Furthermore, the Williams %R indicator may help identify strong trends; this is discussed on the next page.
Next Page - Williams %R and Determining Trend Strength
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