Williams %R Smoothing with Exponentially Smoothed Prices

Summary

Williams %R measures a close against the recent period’s high and low. Its scale runs from −100, when the close matches the period low, to 0, when it matches the period high. The document notes that the oscillator can change quickly, so signals based on its levels may be noisy.

The proposed variant calculates the indicator using exponentially smoothed prices instead of smoothing the completed oscillator. The author says this produces a smoother result and fewer signals while adding less lag than prior approaches that smooth the output. The suggested use is the same as for standard Williams %R. A visual comparison is mentioned, but no data, parameter choices, performance tests, or trading rules are provided, so the claimed reduction in noise and lag cannot be assessed from this document alone.

Key ideas

• Williams %R locates the close within a recent high-low range on a negative scale.
• Rapid changes in standard Williams %R can create noisy level-based signals.
• The variant uses exponentially smoothed prices in its calculation.
• The document claims this approach smooths the indicator with fewer signals and limited added lag.
• No quantified comparison or validated trading results are presented.

Tags

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