24 basic indicators (3) -- w % R

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William indicator -- w % R


William's indicator w % R is also called William's oversold indicator. William's indicator for short is by Larry? William (Larry William), invented in 1973, is a short-term evaluation index commonly used in stock market technical analysis.


Section 1 principles and calculation methods of w % R indicators


I. William's indicator Principle


William's index mainly analyzes the relationship between the highest price, lowest price, and closing price of the stock price within a period of time to determine the phenomenon of oversold stock prices and predict the short-term trend of the stock price. It mainly uses the oscillating points to reflect the superbuy and oversell behaviors in the market, analyzes the comparison between the strengths of both sides, and proposes effective signals to determine the trend of short-term behaviors in the market.
William's index is a technical analysis index for studying the stock price volatility. Its formula design is similar to that of the Random Index. Both of them start from studying the stock price volatility, by analyzing the relationship among the maximum price, lowest price, and closing price of a stock for a period of time, this paper reflects the strength of the market's sales momentum, it is used to evaluate the market atmosphere and determine the degree of deviation between the price and the rational investment value standard.
Like other technical analysis indicators in the stock market, William indicators can be used for analysis and determination of quotations in various cycles. In general, william indicators can be divided into days, weeks, months, years, 5 minutes, 15 minutes, 30 minutes, 60 minutes and other cycles. Although the analysis and determination of William indicators in various cycles are different, the basic principles are similar. For example, the daily William index indicates the relative position of the closing price of the day in the whole price range of the past period of time, and the highest price in these days minus the closing price of the day, divide the price difference by the full price range of the period to get William's indicator for the day.
When calculating the William indicator, the calculation parameter must be determined first. This number can take half of the cycle of a sales cycle. Take a day as an example. Generally, the sales cycle is 8 days, 14 days, 28 days, or 56 days, excluding Saturday and Sunday, the actual trading day is 6, 10, 20, or 40, and the first half is 3, 5, 10, or 20.


Ii. Calculation of w % R indicators


The calculation of the W % R indicator is mainly based on the relationship among the highest price, lowest price, and closing price of the period. The calculation formula of the daily William index is as follows:
W % R = (HN-C) Half (HN-ln) × 100
C Indicates the daily closing price, ln indicates the lowest price in the N period, HN indicates the highest price in the N period, and N indicates the selected calculation time parameter, generally 4 or 14.
Taking the 14-day computing cycle as an example, the calculation process is as follows:
W % R (14) = (H14-C) California (H14-L14) x 100
Among them, C is the closing price of 14th days, H14 is the highest price within 14 days, and L14 is the lowest price within 14 days.
The William indicator indicates the relative position of the closing price of the day within the full price range of the past period. Therefore, the calculated w % R value is between 0--100. The closer it is to 0, the closer it is to the lowest price in the past 14 days. The closer it is to 100, the closer it is to the highest price in the past 14 days, it may be easier to understand William's indicators.
Due to different calculation methods, William's indicator scale is in the same order as the random indicator w % R and the relative strength indicator RSI in some books, that is, the upper bound is 100 and the lower bound is 0. In China's stock market analysis software (Qian Long, analysts and other analysis software systems), the W % R scale is the opposite of the RSI scale. For the convenience of investors, the scale of w % R introduced here is similar to that of Qian Long (Analyst) software, that is, the upper bound is 0 and the lower bound is 100.
In addition, as with the calculation of other indicators, the selected calculation cycle is different, the w % R indicators include daily w % R indicators, weekly w % R indicators, monthly w % R indicators, annual w % R indicators, and minute w % R indicators. The daily w % R and weekly w % R indicators are often used for stock market research. Although their values are different during calculation, the basic calculation method is the same.


Section 2 General Evaluation Criteria for w % R indicators


The general evaluation criteria for w % R indicators are mainly centered on the numerical values of w % R and the shape of w % R curves.


1. w % R Value


Like the kdj indicator, the value range of w % R is 0--100. The difference is that the w % R indicator is 0 as the top and 100 as the bottom.
1. When w % R is in the range of 20-0, it is the overbought area of the W % R indicator, indicating that the market is in the overbought status and the stock price has entered the top. You can consider selling it. W % R = 20.
2. When w % R enters the 80--100 range, it is the oversold area of the W % R indicator, indicating that the market is in the oversold status and the stock price is near the bottom. You can consider buying it. W % R = 80 is generally regarded as a purchase line.
3. When w % R is in the range of 20-80, it indicates that the market has been balanced for the time being, and the stock price is in the sideways arrangement. You can consider holding shares or holding currency.
4. In actual practice, when William's curve breaks through the 20-plus shopping curve and enters the superbuy zone for operation, it indicates that the stock price has increased sharply. This reminds investors to pay close attention to the future trend of the market, only when the w % R Curve hits the 20 th line again can an early warning be given to investors, providing a reference for investors' trading decisions. Similarly, when William curve broke through the 80 superselling line and entered the superselling zone, it indicates that the strong decline in the stock price has eased, which also reminds investors to prepare for the establishment of warehouses, however, only when the w % R Curve breaks through the 80-line again can investors make a real short-term purchase.


Ii. Shape of the W % R Curve


1. When the w % R Curve begins to climb up from the oversold area and exceeds the buy line 80, it indicates that the market may break up and is a signal to start buying.
2. When the w % R Curve falls down from the overbought area and falls below the selling line 20, it indicates that the market may reverse down and it is a signal to start selling.
3. When the w % R Curve exceeded the multi-empty balance line from the oversold area to 50, it indicates that the stock price has a strong upward trend. You can consider short-term overweight purchases.
4. When the w % R Curve breaks through the 50 multi-empty balance line from the overbought area, it indicates that the stock price falls below a strong trend. You can consider short-term overweight and selling.


Section 3 special analysis methods for w % R indicators


I. Top deviation and bottom Deviation


The deviation from the w % R indicator refers to the trend of the W % R indicator curve, which is exactly the opposite of the trend on the price chart. Like other technical analysis indicators, w % R indicators are also divided into top deviation and bottom deviation.
1. Top Deviation
When the stock trend on the K-line chart is one-to-one peak, the stock price continues to rise, while the trend of the W % R curve on the w % R indicator chart is at a high peak, this is called the top deviation. The top deviation is generally a signal that the stock price will reverse at a high position, indicating that the stock price is about to fall in the short term, which is a strong selling signal.


2. Bottom Deviation


When the stock trend on the K-line chart is lower than the peak, the stock price is falling, and the trend of the W % R curve on the w % R indicator chart is higher than the bottom, this is called low deviation. The bottom deviation is generally a signal that the stock price will reverse in a low position, indicating that the stock price is about to rise in the short term, which is a strong buying signal.
The indicator deviation is generally relatively reliable in a strong market. That is, when the stock price is at a high position, the top reversal of the market can be confirmed only when the top deviation occurs. When the stock price is at a low position, generally, the bottom reversal of the market can be confirmed only after repeated divergence.


2. Index bottoming and hitting top


The Analysis and Determination of hit-and-hit indicators is a unique Analysis Principle of William's indicators. The William indicator can accurately prompt the superbuy and oversell, and determine the conversion of strength and weakness. It can measure the high and low points of stock price within a period of time, prompting effective trading signals. Therefore, william's index hitting and bottom-hitting analysis are conducive to investors' short-term sales decisions.
In the general criteria of William's indicators, we mentioned that "20--0" and "80--100" are William's overbought and sold areas, however, this does not mean that when William's indicator curve enters the overbought and oversold area, it will be sold and bought. Only when William's curve breaks through the overbought line (20 lines) from the top down) you can make a decision only when you break through the oversold line (line 80) from the low position. In actual practice, in order to improve the accuracy of analysis and prediction, we will introduce and explain William's analysis principles of index hitting and bottoming.


1. Index hitting


(1) analysis principles of index hitting
The analysis principle of William's index hitting is that after William's curve rises from low to the superbuy area (20-0) of the indicator, after a period of operation, when the curve hits the top of the indicator several times in a row (0 lines), multiple top points will be formed locally, thus forming a very good short-and mid-term selling point. At this time, investors should pay close attention to the trend of indicators. When the curve hits the top several times and begins to fall, and breaks through the overbought line (20 lines) of one of William's important trading lines, it indicates that the stock price may fall short-term, and investors should sell the stock in time.
(2) analysis cycle of index hitting
Different analysis methods should be adopted for different parameters of the analyzed William index. The larger the parameter, the less likely it is to hit the top, and the less the number of times. The larger the parameter is, the more likely it is to hit the top. The specific selection parameters should be analyzed differently. Generally, in practice, William's Index Research parameters can be divided into three effective analysis parameters: short-term and daily parameters, medium-term and daily parameters, and weekly parameters. The William indicators of these three parameters have different analytical significance.
A. Short-term date Parameter Analysis
The short-term date parameters of the William indicator mainly refer to the analysis parameters for less than 10 days, such as 3, 6, and 9 days. The William index of short-term daily parameters is generally applicable to the analysis and determination of "four hits.
Take the William parameter on the 6th as an example. After William's curve hits the zero line four times in the superbuy area and forms a four-fold roof, if the stock price has increased a lot in the early stage, when William's curve breaks down the superbuy line, investors should wait and see in a short time.
B. Analysis of mid-date parameters (600640 legend)
The Medium-date parameters of the William indicator mainly refer to the analysis parameters below the 20-day period, such as the 12-day, 14-day, and 20-day periods. The William index of the mid-day parameter is generally applicable to the analysis and determination of "Two hits" (three hits at most.
Take the William parameter on the 14th as an example. When William curve hits the 0 line twice (or three times) in the superbuy area and forms a local Double top (or triple top), if the stock price has increased a lot in the early stage, when William curve breaks down the superbuy line, investors should wait and see in a short time.
C. Weekly Parameter Analysis
The weekly parameters of the William indicator mainly refer to the analysis parameters for less than 10 weeks, such as 3 weeks, 6 weeks, and 9 weeks. The weekly parameter of William's indicator cannot be too large, because a one-week transaction generally contains five trading days. Therefore, the N-week parameter is equivalent to the 5N-day parameter, for example, the 3-week parameter is the 15-day parameter, however, William's indicator selection parameters are too large, and William's indicator signal is too dull, so it cannot predict the short-term top function. In addition, if William's indicator selection parameters are too large, the William curve may go back without hitting the top, and thus the Analysis and Determination of William's indicator hitting the top will become meaningless.
William's weekly indicator parameter is applicable to the analysis and determination of "One hit top"
Take the William parameter for 6 weeks as an example. When William curve hits 0 in the superbuy area and remains in the superbuy area, investors can wait and see. Once William curve breaks down the superbuy line, investors should resolutely wait and see in the short-term.
It should be pointed out that for short-term stocks that are surging, if William's index breaks down after one summit, it should not be limited to William's principle of hitting the top several times, as long as the William curve breaks down the superbuy line, it can be sold in a short time.


2. Index bottoming


(1) analysis principles of index bottoming
William's Index base hit analysis principle is that after William's curve fell from its high position to its superselling zone (80-), after a period of operation, when the curve hits the bottom of the indicator several times in a row (100 lines), multiple local bottom forms are formed to form a better medium-and short-term purchase point. At this time, investors should also pay attention to the trend of indicators in a timely manner. When the curve hits the bottom several times, it starts to rise and go up beyond the oversold line (line 80) of one of William's important Purchase and Sale lines), indicates that the stock price may rise in the short-term, investors should promptly buy the stock.
(2) analysis cycle of index bottoming
Like hitting the top of an index, William's Index Research parameters can also be divided into three effective evaluation parameters: short-term and daily parameters, mid-term and daily parameters, and weekly parameters. The William indicators of these three parameters have different analytical significance.
A. Short-term date Parameter Analysis
The short-term date parameters of the William indicator mainly refer to the analysis parameters for less than 10 days, such as 3, 6, and 9 days. The William index of short-term daily parameters is generally applicable to the analysis and determination of "four hits.
Take the William parameter on the 6th as an example. When William curve hits the zero line four times in the superbuy area and forms a base-4, if the stock price decreases sharply in the early stage, when William curve breaks the oversold line up, investors should promptly buy shares and make a rebound.
B. Analysis of mid-date Parameters
The Medium-date parameters of the William indicator mainly refer to the analysis parameters below the 20-day period, such as the 12-day, 14-day, and 20-day periods. The William index of short-term daily parameters is applicable to the analysis and determination of "Two hits" (up to three hits.
Take the William parameter on the 14th as an example. When William curve hits 0 twice (or three times) in the oversold area and forms a double bottom (or triple bottom), if the stock price has already declined a lot in the early stage, when William curve breaks down the overbought line, investors should buy stocks in a short time.
C. Weekly Parameter Analysis
The weekly parameters of the William indicator mainly refer to the analysis parameters for less than 10 weeks, such as 3 weeks, 6 weeks, and 9 weeks. Like william's index hitting analysis, the weekly parameters of William's indicator used for analysis and determination cannot be too large. William's indicator selection parameters are too large, and William's indicator signal is too dull, it cannot predict the short-term bottom. In addition, if William's indicator selection parameters are too large, the William curve may turn up without hitting the bottom, and thus the Analysis and Determination of William's indicator is meaningless.
William's weekly indicator parameter applies to the analysis and determination of "One hit bottom"
Take the William parameter for 6 weeks as an example. When William curve hits 0 in the oversold area and forms a bottom, he has been moving in the oversold area, investors can wait and see. Once William curve breaks above the oversold line, investors should promptly buy shares.


Iii. Analysis of different types of stock market Software


The w % R indicator has two different analysis interfaces in China's typical stock market analysis software, Qian Long and analysts. Therefore, the w % R indicators have different analysis methods on these two types of analysis software.
1. Analysis and Determination of w % R indicators on analytics software
In analytics' software, William's indicator structure is relatively simple, mainly composed of a curve. William's indicators have been discussed in the analysis and determination of the analysis software. We will not discuss them here.
2. Analysis and Determination of w % R indicators on Qianlong Software
In Qian Long's software analysis system, w % R indicators are divided into two methods: Dynamic System Analysis and Determination and static system analysis and determination.
(1) evaluation and determination of w % R indicators in Dynamic Systems
In the dynamic analysis system of Qianlong software, the W % R indicator is composed of three w % R curves, investors may set them to short-term w % R curve, medium-term w % R curve, and long-term w % R curve, respectively, for example, w % R on the 6th, w % R on the 14th, and w % R on the 20th. The main analysis method is:
A. When the short-term w % R Curve breaks through the Medium-Term w % R curve from bottom to bottom, it indicates that the short-term weak stock price is about to end. Investors should pay close attention to the changes in the stock price in the next few days.
B. When the short-term w % R Curve breaks through the Medium-Term w % R curve and the long-term w % R Curve breaks through the long-term w % R curve, it is generally referred to as the "Golden Cross" of William's indicator on Qianlong software ", it indicates that the stock price has changed from a weak market to a strong market, and investors should resolutely buy in the short-term.
C. When the short-term w % R Curve breaks through the middle w % R curve and the long-term w % R curve from bottom to top, the short-term w % R curve and the long-term w % R Curve rise at the same time, in the middle, the W % R Curve disappears, indicating that the stock price is in a strong pull phase. Investors can buy stocks at a low price or stay up all the way.
D. When the short-term w % R Curve and long-term w % R Curve enter the superbuy zone and hit the top of William's index (0), as long as the stock price is still rising, investors can still hold shares.
E. When the short-term w % R Curve breaks through the long-term w % R curve from top to bottom, if the share price also drops at the same time, this means that William's index "Death crossover" on the soft price of Qian Long indicates that the short-term strong rise of the stock price is coming to an end, and investors should sell the shares at a peak in time.
F. When the short-term w % R Curve breaks through the long-term w % R curve at a high level, if the short-term w % R Curve and long-term w % R Curve break through William's overbuy line (20 lines), it indicates that the short-term strong pull of the stock price has ended, investors should resolutely sell shares.
G. When the short-term w % R curve and the long-term w % R Curve run down simultaneously, and the middle-term w % R curve starts to run down, it indicates that the short-term weak stock price has started, investors listen to rallies to sell surplus shares or hold coins.
H. When the short-term w % R curve and the medium-term w % R curve fall from a high position to the balance line of William's indicator (50 lines) and run between the 50-lines of William's indicator, it indicates that the weak market characteristics of the stock price are obvious, and investors should firmly hold the currency to wait and see.
(2) Analysis and Determination of w % R indicators in static systems
In the static analysis system of Qianlong software, the W % R indicator is composed of two w % R curves, which are short-term w % R Curve and medium-term w % R curve respectively. The main analysis method is:
A. When w % R> W % R in the short term, the market belongs to the multi-headed market;
B. When the short-term w % R <medium-term w % R, the market belongs to the short market;
C. When the short-term w % R Curve breaks through the Medium-Term w % R curve at the low level, it is generally the "Golden Cross" of the W % R indicator, and the medium-and short-term buy signal;
D. When the short-term w % R Curve breaks through the Medium-Term w % R curve at a high level and down, it is generally the "death crossover" of the W % R indicator and the medium-and short-term sell signal;
E. When the short-term w % R Curve breaks through the Medium-Term w % R curve from the bottom up, and the two curves run upwards at the same time, it indicates that the stock price remains strong, and you can continue to hold shares to rise or buy at a low price.
F. When the short-term w % R Curve breaks through the Medium-Term w % R curve from top to bottom, the two curves run downward simultaneously, indicating that the stock price is still weak and should be sold along the way with currency watching or rallies.


Iii. Discussion on the optimal parameters of William's indicators and decision-making


1. If we take 6 days as the short-term William indicator parameter, when William's indicator value is less than 15, it can be attributed to short-term overbuy of William indicator, which is a short-term sell signal.
2. If we take 6 days as the parameter of the short-term William indicator, when the William indicator value is greater than 85, it can be attributed to the short-term overselling of the William indicator, which is a short-term buy signal.
3. If 20 is the medium-term William indicator parameter, then when William's indicator value is less than 20, it can be attributed to William's mid-term overbuy, which is the center-line selling signal.
4. If the 20-day period is used as the medium-term William index parameter, then when the William index value is greater than 80, it can be attributed to the medium-term overselling of William's indicator, which is a midline buying signal.
5. If the 70-day period is used as the parameter of the long-term William indicator, when the William indicator value is less than 10, it can be attributed to the long-term overbuy of the William indicator, which is a long-term sales signal.
6. If the 70-day period is used as the parameter of the long-term William indicator, when the William indicator value is greater than 90, it can be attributed to the long-term overselling of the William indicator, which is a long-term purchase signal.


Section 4 practical skills of w % R indicators


Compared with other indicators, the W % R indicator is more suitable for the analysis and determination of short-term investment in stocks, and its structure is relatively simple. In the stock market analysis software, some are composed of three curves with different cycles, such as short, medium, and long, and some are composed of one w % R curve. To make the analysis and determination of w % R indicators more intuitive and clear, one w % R curve is usually used for analysis, the analysis and determination methods mainly focus on the position of the W % R curve and the running direction. The following uses the w % R indicator on June 79 as an example to reveal the sales and wait-and-view functions of the W % R indicator. (Note: The w % R indicator is the same as the parameter selection and usage method of Qianlong software and analytics software ).


I. Sales Signals


1. When the w % R curve is consolidating around 50 for a long time, once the w % R Curve breaks through the 50 line from bottom to top, the stock price also breaks through the medium-and long-term average, this means that the medium-term strong stock market is about to begin. This is the midline purchase signal sent by the W % R indicator. At this point, investors can start to buy stocks. (3-1.
2. When the w % R Curve rapidly rises from the vicinity of 50 (or 40) and the stock price rises upwards based on the short-term moving average, once the w % R Curve goes above the 20 line, this means that the short-term strong stock market is about to begin, which is a short-term buying signal issued by the W % R indicator. At this point, investors can buy stocks in the short-term. (3-2.
3. When the w % R Curve slides down from the top 20, once the w % R Curve goes down and breaks down again after 40, if the share price also falls below the medium-and long-term average, this means that the short-term strong stock market may end, which is a short-term sales signal from the w % R curve. At this time, investors should promptly sell shares. (3-3.
4. When the w % R Curve slowly falls below the 50 line from top to bottom, if the stock price also falls below the medium-term moving average, it means that the medium-term weak market of the stock has begun, this is the midline sales signal from the w % R indicator. If the stock price is a stock that has soared in the early stage, this selling signal is more accurate. (3-4.


Ii. Currency Ownership Signal


1. When the w % R curve has been running on the 20 online sides and the stock price is also powered by the strong medium-and short-term moving average, it indicates that the stock price is in a very strong upward trend, this is the short-term bullish signal from the w % R indicator, and investors should firmly hold their shares to be up. (3-5.
2. When the w % R Curve breaks through the 50-line downward, it will continue to run below the 50-line, and the stock price is also squashed by the short-and mid-term average, which indicates the formation of the medium-term weak trend of the stock price, this is the currency holding signal sent by the W % R indicator. At this time, investors should firmly hold on to the coin. (3-6.

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