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Larry Williams %R
Larry William's %R is indicator in technical analysis with similar concept as stochastic K%D indicator.
The formula for calculation is:
| %R = |  |
L (n) is the lowest low and H (n) is the highest high value in last n samples. For n is usually taken value of 14 or 28.
The indicator takes values in the range: (0, -100), which is a little unusual. That's why some analysts are adding 100 to the value of the indicator. However, negative values should not confuse you. Simply -100 is the smallest and 0 is the largest value.
Interpretation
Larry William's %R indicator belongs to the oscillators and its value is limited between -100 and 0. Values of %D line that are above -80 indicate that the security is overbought and the values below -20 that it is oversold. But often happens that when the value exceeds -80 prices continue to rise. Therefore, traders more often are using divergence as criteria for buying and selling signals.
If price of security falls to new low, but %R fails to reach new low, downward trend is losing its power and we could expect trend reversal in the near future. Similar goes for upward trend: if %R fails to reach new high when price hits new high, upward trend is losing its power.
Example
Open chart for google with %R indicator.