Momentum oscillator

Williams %RWilliams Percent Range

Q: What is the difference between Williams %R and Stochastic?

Mechanically very similar — both measure close within the high-low range. Williams %R uses an inverted scale (-100 to 0) versus Stochastic (0 to 100). Williams %R does not have the %D smoothing line by default, making it slightly more responsive.

Q: Why does Williams %R use a negative scale?

Larry Williams' original convention. The math produces a value where 0 = price at the top of the range and -100 = at the bottom. Some traders find this more intuitive than Stochastic's 0-100 (where the scale runs opposite to typical "high = up").

Q: What is the standard Williams %R setting?

14-period lookback. This is the original from Williams' 1973 publication and remains the standard.

Q: Does Williams %R work in trends?

Like all oscillators, it underperforms in strong trends — readings can stay above -20 (overbought) for extended periods. Best used in ranging or transitioning markets.

Q: Is Williams %R better than RSI?

Different tool for different timeframes. RSI is smoother and more reliable on Daily / Weekly. Williams %R is faster and better suited to 15m / 1H short-term work. Many traders use both.

Williams %R is a momentum oscillator on a -100 to 0 scale. Mechanically similar to Stochastic but inverted. Reads overbought above -20 and oversold below -80.

14 candles

Default period

-100 to 0

Range

> -20 / < -80

Signal levels

Short-term reversals + divergence

Best use

What is Williams %R?

Williams %R was developed by Larry Williams in 1973. It measures the close's position within the high-low range over a lookback period, but inverts the scale to run from -100 to 0.

A reading near 0 (top of the range) is overbought; near -100 (bottom of the range) is oversold. The math is essentially Stochastic with an inverted scale — many traders find one or the other more visually intuitive but they signal the same conditions.

Category: Momentum oscillator
Default settings: 14 candles
Signal range: -100 to 0
Introduced by: Larry Williams, 1973

How Williams %R works

Calculation:

Williams %R = ((Highest High - Current Close) / (Highest High - Lowest Low)) * -100

The 14-period default uses the last 14 bars. The inversion of Stochastic's formula produces a value that ranges from 0 (price at the top of the recent range) to -100 (price at the bottom).

Williams %R reacts very quickly to price changes — faster than RSI, similar to Fast Stochastic. This makes it useful for short-term reversal signals but prone to whipsaws in noisy markets.

How to use Williams %R

Three practical setups.

1. Divergence at structure: Same as Stochastic / RSI. Higher high in price + lower high in Williams %R at resistance is a strong reversal signal.

2. Failure swings: When Williams %R reaches -20 (overbought), pulls back, then fails to reach -20 on a subsequent rally, it signals momentum exhaustion. Same inverted pattern for oversold reversals.

3. Combined with Stochastic: When both oscillators agree at extreme readings, the signal is more reliable than either alone.

Williams %R is a short-term tool. On the Daily or Weekly, RSI is generally preferred. On 15m / 1H, Williams %R is competitive with Stochastic.

Want more practical context? Look up unfamiliar terms in the forex glossary, or see how indicators stack on real charts in the trading blog.

Williams %R FAQ

What is the difference between Williams %R and Stochastic?

Mechanically very similar — both measure close within the high-low range. Williams %R uses an inverted scale (-100 to 0) versus Stochastic (0 to 100). Williams %R does not have the %D smoothing line by default, making it slightly more responsive.

Why does Williams %R use a negative scale?

Larry Williams' original convention. The math produces a value where 0 = price at the top of the range and -100 = at the bottom. Some traders find this more intuitive than Stochastic's 0-100 (where the scale runs opposite to typical "high = up").

What is the standard Williams %R setting?

14-period lookback. This is the original from Williams' 1973 publication and remains the standard.

Does Williams %R work in trends?

Like all oscillators, it underperforms in strong trends — readings can stay above -20 (overbought) for extended periods. Best used in ranging or transitioning markets.

Is Williams %R better than RSI?

Different tool for different timeframes. RSI is smoother and more reliable on Daily / Weekly. Williams %R is faster and better suited to 15m / 1H short-term work. Many traders use both.

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