Williams %R

What is Williams %R?

Williams %R is a momentum oscillator developed by Larry Williams that measures the distance from the current close to the highest high of a selected lookback, usually 14 bars, divided by that window’s high-low range. The native scale runs from −100 at the window low to zero at the high, so a reading near zero places the close near the top of its recent range.

A reading above −50 places the close in the upper half of the range. Below −50 places it in the lower half.

How is Williams %R calculated?

Williams %R = −100 × (highest high − close) / (highest high − lowest low).

Use a positive window range. If every high and low is identical, the denominator is zero and the chart needs a defined handling convention.

With a high of $108, low of $100 and close of $107, the result is −100 × $1 / $8 = −12.5. The close sits 12.5% of the range below its high.

Williams %R vs the stochastic oscillator

For the same lookback and inputs, raw Fast Stochastic %K = 100 × (close − lowest low) / (highest high − lowest low).

Subtract 100 from that value to obtain Williams %R. The two lines have identical turns and direction, with different axis labels. They are not vertically flipped. In the worked example, %K is 87.5 and %R is −12.5.

A stochastic signal line or smoothed %K adds another calculation. Match the settings before comparing those readings with raw %R.

Williams %R overbought and oversold levels

The conventional overbought zone runs from −20 to zero, and the oversold zone from −100 to −80. These labels identify the close’s position inside the selected range.

A cross above −80 moves out of the lower 20% zone. A cross below −20 moves out of the upper 20% zone. The current close and the window’s changing extremes all contribute to the reading.

The chart uses the native scale: %R falls through −20 at bar 8 and rises through −80 at bar 13. Both events are read on that −100-to-zero scale.

How to trade Williams %R signals

Pair the chosen crossing with a price level. A pullback setup can require price near defined support and a completed-bar %R cross above −80. Then specify the entry, invalidation, position size and exit. Build the trade in the Options Profit Calculator before the −80 cross prints, comparing each structure’s payoff at the target with its loss below support.

Limitations of Williams %R

• Check the range in dollars before you size the trade. The reading shows where the close sits in the lookback range, and the same −12.5 can come from a narrow or a wide range.
• Read overbought in an uptrend as strength. In a strong uptrend the close can stay near the high, holding %R between −20 and zero for many bars; wait for the price structure to break before you fade it.
• Track the window’s extremes as well as the close. Old extremes leaving the window can move %R even when the close is unchanged, and a different lookback or interval gives a different line.
• Confirm crossings with price in a sideways market. The raw line is unsmoothed, so it can cross −20 and −80 many times when price chops, and a window with no high-low range has no defined value.

Bottom line

Williams %R places the latest close within its recent high-low range on a scale from −100 to zero. Use a stated lookback, read −20 and −80 as positions in the range rather than reversal calls, and pair a crossing with a defined price level, entry, stop and exit.