The WMSR indicator is an indicator with both overbought and oversold and strong and weak boundaries. It has similarities with the KDJ indicator. It has an antenna and a ground wire, and a median line separated by 50, and it also fluctuates at 0- Between 100. However, one important difference between RSI and KDJ is that it takes 0 as the top and 100 as the bottom.
The William indicator, also known as the William Overbought and Oversold Index, determines the timing of buying and selling by analyzing the peaks and valleys in the fluctuations of stock prices. It uses oscillation points to reflect the overbought and oversold phenomenon of the market, can predict the highs and lows during the cycle, thereby showing effective buying and selling signals. It is a technical indicator used to analyze the short-term market trend.
The calculation of the WMSR indicator is mainly based on the relationship between the highest price, the lowest price and the closing price at the end of the analysis period.
Take the Japanese-Williams indicator as an example, its calculation formula is:
WMSR = (Hn—C) ÷ (Hn—Ln) × 100
n: is the trading period set by the trader
C: The latest closing price on the nth day
Hn: the highest price in the past n days
Ln: the lowest price in the past n days
3.1 WMSR uses 0-20 as the top area and 80-100 as the bottom area.
3.2 When the WMSR curve enters the antenna overbought zone above 20, no immediate action is allowed, and only when it goes back below 20 can be sold.
3.3 When the WMSR curve enters the oversold area below 80, it cannot be moved immediately. Only when the W%R curve breaks through 80 when the W%R curve returns. This can effectively overcome the inaccuracy of the W%R indicator such as overbought and then overbought, oversold and oversold signals.
3.4 If the WMSR touches the top 4 times upwards, the fourth touch is a very good selling point.
3.5 If the WMSR touches the bottom 4 times downwards, the 4th touch is a good buying point.
Of course, the "4 times" mentioned here should not be used mechanically, everything should be decided based on the prevailing circumstances. In addition, the W%R indicator and RSI indicator can be used together to enhance the accuracy of the signal.
The three W&R indicator lines of W&R on the 13th, W&R on the 34th and W&R on the 89th were all below -80, indicating that the market is in an extremely oversold state and the market is about to see a long-term bottom. The three W&R indicator lines of W&R on the 13th, W&R on the 34th and W&R on the 89th were all higher than -20, indicating that the market is in an extremely overbought state and the market is about to see a long-term peak.
The W&R indicator line on the 13th is more sensitive, which is reflected in the frequent violent fluctuations in the graph, and often does not have the role of trend judgment.
The W&R indicator line on the 34th can be used to judge the mid-term trend. When the W&R indicator on the 34th moves upward, it indicates that the mid-term trend is improving. When the W&R indicator moved downward on the 34th, it indicated that the medium-term trend was fading.
(From Baidu Encyclopedia, it is recommended that WMSR be calculated and considered comprehensively on the 6th and 34th at the same time)