If you are an investor or have a financial advisor, then you may have heard of the Williams Percentage Range. This is a tool that helps determine when to sell your stocks to maximize profits and minimize losses. If this sounds like something that might be beneficial for you, then please read on!
Definition
The Williams Percentage Range is a proprietary formula developed by Larry Williams. He was the author of several books about trading and investing, including “How I Made One Million Dollars in the Stock Market” (1975), “Be Your Own Financial Adviser” (1978), and “Trading for Profit: You Can Master Trading Systems!” (1986). The book that includes his range formula is called Technical Analysis from A to Z . It focuses on how investors can use technical analysis when making investment decisions.
Williams’ primary focus when developing this formula was to help retail traders determine when their stocks were overvalued or undervalued compared to other market participants. He wanted an easy way to identify if they should buy stock or sell some off at current market prices. He developed the percentage range to help investors determine when they should sell their stock and lock in profits, or buy more undervalued security.
How to calculate the Williams Percentage Range
The Williams Percentage Range is calculated by taking the high price for that day (H), adding it to one-half of the previous day’s low (L) plus that days’ closing price (C). This calculation gives you a percent value which you then use as your selling point. Also, Williams percent range indicator is set up as a percentage of the previous day’s high rather than stock index or industry. This indicator can be calculated on any time frame you want, but it is usually used daily to determine if there are enough factors for a trade.
The percent range value will vary depending upon what general market conditions exist at that point in time and which direction the price of your security is going (up or down). If H-L-C equals 100% then this means that prices traded within their normal trading ranges over the past few days.
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The difference between a positive and negative percentage range
Williams wanted to provide investors with something that they could use as a selling point for their stocks, but he also did not want them confused by using the wrong indicator. For this reason, Williams made it clear which values should be used in different market conditions. A positive percentage range is calculated when H-L-C equals greater than 100%.
This means that prices were higher on the trading day than they had been over the past few days. The negative Williams percentage range is calculated when H-L-C equals less than 100%. This means that prices were lower on the trading day compared to the past few days.
Using the Williams Percentage Range to make a decision
The formula for this range is not complicated, but it can be confusing because you have both positive and negative values. It is always best to use a chart when doing technical analysis. The idea behind using a chart with the percent range indicator on it is that investors want to see what price levels other market participants are willing or unwilling to buy at during different times of day/week/month/year.
Williams Percentage Range is a tool that can be used to make decisions. It has been shown time and again as an effective way for making better business decisions because it incorporates all of the information you need in order to provide a sound basis for your decision-making process. The percentage range tells you which input data are important or not so important at different ranges on either side of 50%.
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