Using Williams %R with Bollinger Bands to Flag Range Extremes

Summary

The document introduces Williams %R as a momentum oscillator that locates the closing price within the recent high-low range over a chosen lookback period. Its scale runs from −100, where the close matches the period low, to 0, where it matches the period high. This reversed negative scale distinguishes it from oscillators commonly shown on a zero-to-100 scale; some implementations shift the values by adding 100.

The described variant adds Bollinger bands to Williams %R to help identify possible breaks from overbought or oversold levels. The text does not specify the band calculation, signal thresholds, trade entry or exit rules, or any backtest or market evidence. It therefore offers a basic indicator concept rather than a fully defined or validated trading strategy; users would need to specify and test those choices before drawing conclusions about performance.

Key ideas

• Williams %R places the close relative to the recent high-low range.
• Its standard scale runs from −100 at the range low to 0 at the range high.
• The described variant adds Bollinger bands to flag potential overbought or oversold breaks.
• The document provides no signal rules or performance evidence, so the idea requires testing.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.