Williams %R with Bollinger Bands

The Williams %R w/ Bollinger Bands indicator is a combined technical analysis tool that overlays the Williams %R momentum oscillator with Bollinger Bands to enhance the identification of overbought and oversold market conditions.
Manufacturer: nt8indicators
SKU: WPRBB
$9.90

What Each Component Does:

  • Williams %R:
    • Measures momentum, showing where the current closing price is relative to the high-low range over a specified period (usually 14 periods).
    • Values range from 0 (overbought) to -100 (oversold).
  • Bollinger Bands:
    • Consist of a moving average (typically 20 periods) with two bands placed a set number of standard deviations (usually 2) above and below the moving average.
    • Help visualize price volatility and potential reversal points.

Combined Indicator Logic

When combined, the strategy often looks for:

  • Williams %R indicating overbought/oversold levels (e.g., above 50 for overbought, below -50 for oversold),
  • Price touching or crossing Bollinger Bands (upper band for overbought, lower band for oversold).

Typical signals:

  • Sell Signal:
    If Williams %R > 50 (overbought) AND price is at/above the upper Bollinger Band, the asset may be ready to reverse downward.
  • Buy Signal:
    If Williams %R < -50 (oversold) AND price is at/below the lower Bollinger Band, the asset may be ready to reverse upward.

Why use both?

  • Williams %R provides the momentum context (how “strong” or “weak” the price is).
  • Bollinger Bands provide a volatility context (how far the price has stretched from its average).
  • Combining them can filter out false signals and confirm potential turning points.
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