What Is The Williams %R Indicator Used For When Trading Stocks

The Williams %R indicator is similar to the stochastic oscillator, but some investors consider it to be more reliable. It is also used for measuring overbought and oversold levels.

However, the readings are a bit different than that of the stochastic oscillator. A reading of 0 to -20 would be considered overbought; while a reading of -80 to -100 is considered oversold. However, these readings can remain above or below these marks for extended periods of time. Therefore, it is usually recommended to wait until you can actually confirm the change in direction. Many investors will wait until the Williams %R crosses over -50 to confirm the change in direction.