The Williams R stock indicator is its use in crypto trading.
Williams R is an indicator created by Larry Williams. However, there is an opinion that George Lane developed it. It is believed that this indicator is based on momentum and is similar in its "nature" to a stochastic oscillator. The indicator helps to determine the overbought and, conversely, oversold condition of the required market. It signals a reversal situation. Williams R analyzes the closing price in comparison with its range from maximum to minimum values for the required time period.The William R indicator is based on the theoretical concept that the price acts as an indicator of equilibrium in the market at the moment.
The indicator successfully performs its main function – displaying overbought and oversold zones, as well as compiling appropriate signals. Quite often Williams R is used as an additional filter while working with other indicators. Then the maximum efficiency of the functioning of Williams R. is achieved.Calculation of the Williams R indicator
The Williams R calculation formula resembles the scheme that uses Stochastic Oscillator.
Williams R expresses the relationship between the difference between the minimum and maximum with the closing price and the "minimum-maximum" interval itself, which, in turn, are multiplied by -100. Most often, a range of 14 days is used for calculations, but you can adjust this parameter according to your needs.So, the calculation formula looks like this: %R = (max(Highn) — Closing Price) / (max(Highn) — min(Low)) * (-100).
The maximum indicator displays the highest strength of the buyer ("bull"), the minimum acts as the ultimate strength of sellers ("bears").
The closing price shows which of these groups took the leading position in the preponderance in the presented period.Williams R indicator Signals
Williams R functions as an oscillator and moves between extreme values from 0 to -100.
The indicator has several main signals:• indicators above -20 indicate that the market is overbought;
• indicators below -80 report oversold.
Here it is necessary to take into account the fact that just the fact of getting into a particular zone does not mean that there is an absolute need to immediately make a purchase or sale.
So, the indicator can be located in the overbought zone in the case when the price is only approaching an uptrend.The divergence signal appears in the Williams R indicator quite rarely.
However, as statistics show, with a high probability it turns out to be true. "Bullish" divergence appears when the price indicator reaches a new low, "bearish" - when the price indicator reaches a new maximum.Divergence signals will help predict a possible reversal situation in the market.
"Bullish" divergence indicates a situation suitable for potential purchases, "bearish" - for sale.Advantages of using Williams R
Williams R refers to limited oscillators, and therefore greatly simplifies the recognition and analysis of overbought and oversold signals presented.
It does not require additional mathematical calculations and calculations. William R functions effectively at all time intervals, generates sufficiently clear signals and is able to be optimized for almost any trading practice.The main advantage of the indicator is its dynamics.
The presented information can be used to analyze various time frames (intraday, weekly, monthly). William R displays data ahead of time, which will allow you to see the current market situation in advance, analyze it and draw appropriate conclusions.