The values of the Williams’ Percent Range (%R) oscillator lie between 0 and 100. If the oscillator is between 80% to 100%, it denotes an oversold condition, whereas values in the range from 0% to 20% signify an overbought condition. The formula to calculate Williams’ Percent Range oscillator is similar to the one used to calculate the Stochastic Oscillator:
%R = (MAX (HIGH (i – n)) – CLOSE (i)) / (MAX (HIGH (i – n)) – MIN (LOW (i – n))) * 100
CLOSE (i) – the current close price;
MAX (HIGH (i – n)) – the highest top over the previous n periods;
MIN (LOW (i – n)) – the lowest bottom over the previous n periods.
Williams’ Percent Range (%R) oscillator signals:
Bullish divergence / bearish convergence – the main signals that point to the weakness of the current trend; In a flat market an exit from the overbought / oversold area is a signal to sell / buy. To add Williams’ Percent Range index in MetaTrader 4 use the “Insert -> Indicators -> Oscillators -> Williams’ Percent Range, %R” menu sequence.