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I forget the variables.
Think they are:
(1) the time window selected by a trader;
(2) the highest high of the selected period, ie.a
7-day high
(3) the lowest low of the selected period ie. a 7-
day low;
(4) the latest close;
%R is closely related to stochastics.
%R is designed to cluctuate between 0 and 100 percent. It equals 0 (plotted
at the top of chart) when bulls reach the peak of their power and close
prices at the top of the range. It reaches 100 percent when bears are at the
peak of their power and close prices at the bottom of the recent range.
A rule of thumb with all oscillators-when in doubt, make them shorter. This
is the opposite of trend-following indicators-when in doubt, make them longer.
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