fbpx

What is Larry Williams R%?

Larry Williams R% Definition. Larry Williams %R is a simple but effective momentum oscillator and was described by Larry Williams for the first time in 1973. It is a version of the stochastics oscillator and consists of the difference between the high price of a predetermined number of days and the current closing price. That difference is then divided by the total range. The result is plotted on a “0-100” scale, and signals are given when curves crossover the 20 or 80 thresholds. Williams %R compares each closing price to the recent range indicating whether bulls can close the price near the top of the range, or bears can close the market at the bottom of the price. Divergences between price and Williams %R rarely occur, but when they do, then these signals identify the best trading opportunities using Williams %R. Below is a 1-hour price chart of the EUR/USD with Williams %R set at 14 showing bullish divergence. The A-B line indicates price declining and the C-D line indicates the Williams %R moving upwards showing bullish divergence. You would look to go long in the market when this bullish divergence occurs on the Williams %R. Conversely, when the opposite trend prevails, then a shorting opportunity is suggested. Overbought and oversold conditions can also be denoted with this indicator, but as with other oscillators, the timing of the trend must come from other observations.

Larry Williams R%


Risk Statement: Trading Foreign Exchange on margin carries a high level of risk and may not be suitable for all investors. The possibility exists that you could lose more than your initial deposit. The high degree of leverage can work against you as well as for you.