Williams %R

Williams %R is an overbought and oversold technical indicator that can give easy to interpret 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 gives easily interpreted buy and sell signals, as is demonstrated in the chart below of the Nasdaq 100 exchange-traded fund QQQQ:

Outline:

1. Williams %R

2. Williams %R and Determining Trend Strength

Next Page - Williams %R and Determining Trend Strength

Buy Signal

When the Williams %R indicator is below the oversold line (20) and it rises to cross over the 20 line, then buy.

Sell Signal

Sell when the Williams %R indicator is above the overbought line (80) and then falls below the 80 line.

In addition to giving clear buy and sell signals, the Williams %R indicator can help identify strong trends; this is discussed on the next page.