Introduction:
Percentage range was invented by Larry Williams Williams in 1973. It is a simple, but very effective oscillator speed of price movement. In fact it is the main competitor to the stochastic oscillator, which you can read earlier on our site. Momentum oscillator main task, which is to assess the market overbought and oversold.
Description of indicator:
Currently, it is the balance between the parties to the trade market at the moment. The maximum power of the "bull" or sellers shows the maximum price, and the maximum power of the "bears" or sellers shows the minimum price. The main factor is the market closing price, since it shows how much power at the moment (buyers or sellers) has the advantage and to what extent. The indicator "percentage range of Williams' compares each closing price of the last trading range, and indicate whether or not the" bulls "to close the price closer to the maximum range, or" bears "to a minimum.
If the "bulls" can not close a price close to the maximum range in an uptrend, they are weaker than they seem, and the opportunity to sell. If the "bears" can not close a price closer to the minimum in a downtrend, it is the opposite situation, and an opportunity to buy. On the evidence of this display wakes look like this:
1. If the closing price is close to the maximum range, the indicator line awakens be near 0 (Counts)
2. If the closing price is close to the minimum range, the indicator line wakes close to 100 (the minimum value of the indicator).
The use of the indicator:
The main and most reliable signal indicator "Williams Percent Range" is the divergence. Many are already familiar with this concept. But still, if a new high above the previous one, and the display new high below the previous, this is a signal to sell. If a new low below the previous and the new low in the display above the previous one, it is a signal to sell.
One method of using this indicator will determine overbought and oversold conditions in the market. If the indicator line in the area from 0 to -20, which means that the market is oversold, and if the region from -100 to -80, which means that the market is oversold. But that does not mean a signal to buy or sell, as the price for a long time can move towards an overbought or oversold.
Deficiencies in this indicator is almost not, as he does not give a clear signal to buy or sell. But its use is only going to benefit.