Williams %R (Williams Percent Range) is a momentum oscillator developed by Larry Williams that measures overbought and oversold levels. It ranges from 0 to -100 and is similar to the Stochastic Oscillator but inverted.

What is the Williams %R formula?

Williams %R = (Highest High - Close) / (Highest High - Lowest Low) × -100. The result is a negative number between 0 and -100.

What do Williams %R readings mean?

Readings from 0 to -20 indicate overbought conditions (potential sell signal), while readings from -80 to -100 indicate oversold conditions (potential buy signal). Values between -20 and -80 are considered neutral.

What is the best period for Williams %R?

The default and most common period is 14, which works well for most trading timeframes. Shorter periods (e.g., 10) provide faster signals with more noise, while longer periods (e.g., 21) give smoother, more reliable signals.

How is Williams %R different from RSI?

While both are momentum oscillators, Williams %R uses a different scale (0 to -100 vs 0 to 100) and calculation method. Williams %R compares the close to the high-low range directly, making it more sensitive to price movements.

Williams %R Calculator

Calculate the Williams Percent Range to identify overbought and oversold market conditions with this powerful momentum oscillator.

Highest High

Highest price in the period

Lowest Low

Lowest price in the period

Current Close

Most recent closing price

Lookback Period

Standard: 14 periods

How to Use the Williams %R Calculator

Enter Highest High: Input the highest price the asset has reached during the lookback period (typically 14 periods).
Enter Lowest Low: Input the lowest price the asset has reached during the same period.
Enter Current Close: Input the most recent closing price.
Set Period: Optionally adjust the lookback period (default is 14).
Calculate: Click "Calculate Williams %R" to see the result and market condition.

What is Williams %R?

Williams %R, also known as Williams Percent Range, is a momentum oscillator developed by legendary trader Larry Williams. It measures the level of the close relative to the highest high for a specified lookback period. The indicator oscillates between 0 and -100, making it similar to the Stochastic Oscillator but with an inverted scale.

Unlike most oscillators that range from 0 to 100, Williams %R uses a negative scale. This design choice reflects the indicator's focus on how far the current close is from the recent high, rather than the low.

Williams %R Formula

%R = (Highest High - Close) / (Highest High - Lowest Low) × -100

Where:

Highest High = Highest price over the lookback period
Lowest Low = Lowest price over the lookback period
Close = Most recent closing price

Interpreting Williams %R Readings

Overbought (0 to -20): When Williams %R rises above -20, the asset is considered overbought. The close is near the top of the high-low range, suggesting potential selling pressure ahead.
Oversold (-80 to -100): When Williams %R falls below -80, the asset is considered oversold. The close is near the bottom of the range, suggesting potential buying opportunities.
Neutral (-20 to -80): Values in this range indicate the market is neither overbought nor oversold.

Williams %R Trading Strategies

1. Overbought/Oversold Strategy

The most common approach is to look for buy signals when Williams %R crosses above -80 from oversold territory, and sell signals when it crosses below -20 from overbought territory.

2. Failure Swings

A failure swing occurs when Williams %R enters overbought or oversold territory, pulls back, and then fails to re-enter that extreme zone. This pattern often precedes significant price moves.

3. Divergence Trading

Bullish divergence occurs when price makes lower lows but Williams %R makes higher lows. Bearish divergence occurs when price makes higher highs but Williams %R makes lower highs. These divergences can signal potential reversals.

Williams %R vs Stochastic Oscillator

Williams %R and the Stochastic Oscillator are closely related but have key differences:

Scale: Williams %R uses 0 to -100, while Stochastic uses 0 to 100.
Calculation: Williams %R measures distance from the high, while Stochastic measures distance from the low.
Signal Line: Stochastic includes a %D signal line (SMA of %K), while Williams %R is typically used alone.

Frequently Asked Questions

What is the best period setting for Williams %R?

The standard setting is 14 periods, which works well for most timeframes. Day traders might use shorter periods (7-10) for faster signals, while swing traders might prefer longer periods (21-28) for smoother readings.

Can Williams %R be used alone for trading?

While Williams %R provides valuable insights, it's best used in combination with other indicators like Moving Averages, RSI, or MACD to confirm signals and reduce false positives.

Why is Williams %R negative?

Larry Williams designed the indicator with a negative scale to emphasize that it measures how far the close is below the highest high. A reading of 0 means the close equals the highest high, while -100 means it equals the lowest low.

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