Percent "R"

Definition:

Percent "R" is a momentum indicator measuring overbought and oversold levels and compares the price action's close to the high-low range over a defined period of time, typically 14 days. This indicator is also called the "Williams %R."

Background:

The Percent"R" has a mathematically similar outcome when plotted on a chart to the "Stochastic" indicator. There are two differences between the two. The Stochastic indicator is plotted from 0 to 100 and the Percent"R" is plotted from 0 to -100. The second difference is that the Stochastic indicator has internal smoothing.

Percent"R" was introduced by Larry Williams.

Practical Use:

Traders usually consider price action over 80 being oversold and under 20 overbought.

When using Percent "R" in technical analysis, both the entry and exit signals are assessed by most analysts in context with both price and volume of the chart being analyzed.