Williams %R is an overbought and oversold technical indicator that can give easy to interpret buy and sell signals. Williams %R is very similar to the Stochastic Fast indicator (see: Stochastics) as the chart below will illustrate:
Like Stochastics, the Williams %R indicator gives easily interpreted buy and sell signals, as is demonstrated in the chart below of the Nasdaq 100 exchange-traded fund QQQQ:
Williams %R Buy Signal
When the Williams %R indicator is below the oversold line (20) and it rises to cross over the 20 line, then buy.
Williams %R Sell Signal
Sell when the Williams %R indicator is above the overbought line (80) and then falls below the 80 line.
In addition to giving clear buy and sell signals, the Williams %R indicator can help identify strong trends; this is discussed on the next page.
