Williams %R
Williams %R is a momentum oscillator that shows where the close sits relative to the highest high of the last 14 periods, on a scale from 0 to −100. Readings from 0 to −20 are overbought and −80 to −100 oversold.
Williams %R is one of the classic overbought/oversold oscillators. It answers a simple question: how close did price close to the top of its recent range? It is essentially the stochastic oscillator turned upside down, which is why its scale runs from 0 to −100. This entry explains the formula, how to read it and its limitations.
- Category
- Indicators and Tools
- Reading time
- 3 min
- Also called
- Williams Percent Range, Williams %R indicator, %R
- Updated
Williams %R in plain words
Developed by Larry Williams, %R is a momentum indicator that measures the close relative to the highest high of the look-back period.1
It moves from 0 to −100: 0 to −20 counts as overbought, −80 to −100 as oversold.1
It is the inverse of the fast stochastic oscillator, which measures the close relative to the lowest low instead.2
How Williams %R is calculated, step by step
Choose a period
14 is the default.
Find the highest high
Over the last 14 periods.
Find the lowest low
Over the same periods.
Apply the formula
(Highest high − close) ÷ (highest high − lowest low) × −100.
Read the zones
Above −20 overbought, below −80 oversold. See Overbought and Oversold.
Confirm with trend
Overbought can persist in strong uptrends.
Worked examples
Example 1 — Overbought
Overbought14-period high $60, low $50, close $59.
| %R | ($60 − $59) ÷ ($60 − $50) × −100 = −10 |
Readings from 0 to −20 are considered overbought.1
Example 2 — Oversold
OversoldSame range, close $51.
| %R | ($60 − $51) ÷ $10 × −100 = −90 |
Readings from −80 to −100 are considered oversold.1
Example 3 — Same as the stochastic
Same signalClose $59 in the $50–$60 range.
| Fast %K | ($59 − $50) ÷ $10 × 100 = 90 |
| Williams %R | −10 |
| Relationship | %R = %K − 100 |
The fast stochastic and Williams %R draw the same line on different scales.1
Williams %R vs stochastic oscillator
| Aspect | Williams %R | Fast stochastic |
|---|---|---|
| Measures close vs | Highest high | Lowest low |
| Scale | 0 to −100 | 0 to 100 |
| Overbought | 0 to −20 | Above 80 |
| Smoothing | None by default | Slow and full versions. See Stochastic Oscillator |
How traders use Williams %R
Overbought and oversold
Spotting stretched prices in ranges.
Momentum confirmation
Staying near 0 in strong uptrends.
Divergences
Price makes a new high, %R does not. See Divergence.
Short-term timing
Entering pullbacks within a trend. See Pullback.
Advantages and disadvantages
Advantages
- Simple and fast.
- Clear overbought and oversold zones.
- Works on any time frame.
Disadvantages
- Very sensitive and noisy.
- Can stay overbought for a long time in trends.
- Negative scale confuses some traders.
Going deeper
Read as far as you need. Each level builds on the one before it.
Why it is negative
Beginner
The raw value is multiplied by −100 to correct the inversion against the stochastic, so the scale runs from 0 down to −100.1
Signals carry over
Intermediate
Because %R and the fast stochastic produce identical lines, stochastic signals apply to %R as well.1 See Stochastic Oscillator.
Trend context
Advanced
In strong trends, overbought readings can mean strength rather than a top. Many traders only take oversold buy signals in uptrends. See Trend Following.
Common mistakes
Shorting every overbought reading
Strong trends stay overbought.
Misreading the scale
−10 is overbought, not weak.
Using too short a period
Noise increases sharply.
No confirmation
Pair it with structure or volume.
Check your understanding
Test yourself before moving on. Each answer comes with an explanation.
Key points to remember
- Williams %R compares the close with the period's highest high.
- The scale runs from 0 to −100.
- 0 to −20 is overbought; −80 to −100 oversold.
- It mirrors the fast stochastic.
- Overbought can persist in strong trends.
Frequently asked questions
What is the best Williams %R setting?
Is Williams %R the same as the stochastic?
Can Williams %R be used for crypto?
Further learning
- Stochastic Oscillator
Its mirror image.
- Relative Strength Index
Another classic oscillator.
- Overbought and Oversold
How to read extreme zones.
- Divergence
A stronger signal than zones alone.
Sources
This article is written in our own words. The sources below support the specific facts, rules and figures marked with a number in the text. Links open the original publisher’s page.
- StockCharts ChartSchool. Williams %R (opens in a new tab) Checked .
- StockCharts ChartSchool. Stochastic Oscillator (Fast, Slow, and Full) (opens in a new tab) Checked .
Educational content, not financial advice. Examples use hypothetical prices and simplified costs; actual fees, margin rules and regulations vary by broker, market and country. We are not affiliated with any publisher linked above. Last reviewed . Report an error or request a source credit.