rounded corner
rounded corner
top border

Indicator Help

Indicator Index
* Members Only

  1. Accumulation / Distribution
  2. Aroon Oscillator *
  3. Aroon Up/Down *
  4. Average Directional Index
  5. Average True Range
  6. Bollinger Bands
  7. Bollinger Band Width *
  8. Chaikin Money Flow Index *
  9. Chaikin Oscillator *
  10. Chaikin Volatility *
  11. Close Location Value *
  12. Commodity Channel Index
  13. Detrended Price Oscillator *
  14. Donchian Channel *
  15. Donchian Channel Width *
  16. Ease of Movement *
  17. Exponential Moving Average
  18. MACD
  19. Mass Index *
  20. Momentum
  21. Money Flow Index
  22. Negative Volume Index *
  23. On Balance Volume
  24. Pcnt Price Oscillator *
  25. Pcnt Volume Oscillator *
  26. Performance *
  27. Positive Volume Index *
  28. Price Envelope
  29. Price Volume Trend *
  30. Rate of Change
  31. Relative Strength Index
  32. Simple Moving Average
  33. Stochastic - Fast
  34. Stochastic - Slow
  35. Stochastic RSI *
  36. Standard Deviation *
  37. Triple Moving Average *
  38. TRIX *
  39. Ultimate Oscillator
  40. Volume
  41. Weighted Moving Average *
  42. Williams Percent R

Williams Percent R

Not a member? Subscribe now!

Noted author and commodity trader, Larry Williams, developed a trading formula called the %R. In his original work, the method examined ten trading days to determine the trading range. Once the ten day trading range was determined, he calculated where today's closing price fell within that range.

The system attempts to measure overbought and oversold market conditions. The %R always falls between a value of 100 and 0. The trading rules are simple. You sell when %R reaches 10% or lower and buy when it reaches 90% or higher.

These values are reversed from normal thinking, especially if you use the RSI as a trading tool. The %R works best in trending markets, either bull or bear trends. Likewise, it is not uncommon for divergence to occur between the %R and the market. It is just another hint of the market's condition.

As to the length of the interval for the study, some technicians prefer to use a value that corresponds to 1/2 of the normal cycle length. If you specify a small value for the length of the trading range, the study is quite volatile. Conversely, a large value smoothes the %R, and it generates fewer trading signals.

Parameters:
  • Period (10) - the number of bars, or interval, used to calculate the study. If the chart displays daily data, then period denotes days; in weekly charts, the period will stand for weeks, and so on. If you specify a small value for the length of the trading range, the study may become volatile. Conversely, a large value smoothes the %R, and it generates fewer trading signals.
  • Range (100) - the distance between the upper and lower threshold lines.
Computation
You must first determine the highest high and lowest low for the length of the interval. This is the trading range for the specified interval. The prices for the AST 'n' intervals are examined to find that trading range. Once those values are determined, the general formula for the %R is as follows:
%Rt = ( (Highn - Closet) / (Highn - Lown) ) * 100
  • %Rt is the percent of the range for the current period.
  • Highn is the highest price during the past n trading periods.
  • Closet is the closing price for the current period.
  • Lown is the lowest price during the past n trading periods.
  • n is the length of the interval.
Assume the market is Treasury Bills. The high for the past ten trading intervals is 9275, and the low is 9125. The closing price in the current period is 9267. If you substitute those values in the equation, you get:
      %R = ( (9275 - 9267) / (9275 - 9125) ) * 100
      = (8 / 150) * 100
      = 5.33
The computations continue with the software continually checking for a new high or low for the length of the interval specified. The %R can be a volatile indicator. It fluctuates quickly and widely.
Published by Barchart
Home  •  Charts & Quotes  •  Commentary  •  Authors  •  Education  •  Broker Search  •  Trading Tools  •  Help  •  Contact  •  Advertise With Us  •  Commodities
Markets: Currencies  •   Energies  •   Financials  •   Grains  •   Indices  •   Meats  •   Metals  •   Softs

The information contained on InsideFutures.com is believed to be accurate but is not guaranteed. Market data is furnished on an exchange delayed basis by Barchart.com. Data transmission or omissions shall not be made the basis for any claim, demand or cause for action. No information on the site, nor any opinion expressed, constitutes a solicitation of the purchase or sale of any futures or options contracts. InsideFutures.com is not a broker, nor does it have an affiliation with any broker.


Copyright ©2005-2018 InsideFutures.com, a Barchart.com product. All rights reserved.

About Us  •   Sitemap  •   Terms of Use  •   Privacy Policy