Welcome to the RJO Futures trading terms glossary. Within this glossary, you will find an expansive list of trading terms covering commodity, option, and futures trading terminology. Bookmark this section as a quick reference for definitions of trading terms as you browse the Internet and our site for more information on futures and options trading within the financial and commodities markets.
Larry Williams’ Percentage Range indicator measures the current momentum of price over a user defined period. Also known as the “%R”, this momentum indicator oscillates between 0 and -100 as it compares the current closing price with respect to the highest high and lowest low over the range.
A value closer to zero signifies bullish momentum as price is in the top of the range over the look back period. When the indicator is closer to -100 it means price as the bottom of the range meaning bearish momentum is strong.
There are many ways to use the %R, with the most well-known uses being: 1) to identify overbought and oversold markets for those traders seeking to pick tops and bottoms in price, 2) identify strong momentum markets, 3) giving trade signals when the indicator passes over the mid-line (-50) having been in either in the overbought or oversold territory and, one lesser known use, 4) identifying market divergence.