Williams %R (Williams Percent Range) was developed by Larry Williams. It is a momentum oscillator that moves between 0 and โ100, showing where the current closing price sits relative to the highest high over a lookback period. It is essentially the inverse of the Stochastic %K.
Williams %R Formula (Default: 14 period)
%R = ((Highest High โ Close) รท (Highest High โ Lowest Low)) ร โ100
Range: 0 to โ100
Reading Williams %R
| %R Level | Signal | Interpretation |
|---|---|---|
| 0 to โ20 | Overbought | Price is near the top of its range |
| โ20 to โ50 | Neutral bullish | Moderate bullish territory |
| โ50 | Midpoint | Neither overbought nor oversold |
| โ50 to โ80 | Neutral bearish | Moderate bearish territory |
| โ80 to โ100 | Oversold | Price is near the bottom of its range |
Note: Williams %R is inverted โ the overbought zone is near 0 (not 100 like RSI). Keep this in mind when reading charts.
Williams %R Strategies
Strategy 1 โ Failure Swings
Bullish Failure Swing:
1. %R reaches oversold (below โ80)
2. %R bounces above โ50
3. %R pulls back but stays above โ80 (higher low)
4. %R crosses back above โ50 โ Buy signal
This pattern confirms the oversold condition is exhausted.
1. %R reaches oversold (below โ80)
2. %R bounces above โ50
3. %R pulls back but stays above โ80 (higher low)
4. %R crosses back above โ50 โ Buy signal
This pattern confirms the oversold condition is exhausted.
Strategy 2 โ Momentum Confirmation
Only take long trades when %R is above โ50 (bullish half)
Only take short trades when %R is below โ50 (bearish half)
Use with: EMA crossover signal for entry timing
Only take short trades when %R is below โ50 (bearish half)
Use with: EMA crossover signal for entry timing
Williams %R vs RSI vs Stochastic
| Indicator | Range | Speed | Best Use |
|---|---|---|---|
| Williams %R | 0 to โ100 | Very fast | Short-term entry timing |
| RSI | 0 to 100 | Medium | Trend momentum filter |
| Stochastic | 0 to 100 | Fast | Overbought/oversold + crossover |
Williams %R reacts very quickly to price changes โ faster than RSI. Use it on 5-minute or 15-minute NSE charts to time precise intraday entries after the daily trend direction is established.
Common Settings
- %R(14) โ Default, works well on daily charts
- %R(7) โ More sensitive for intraday use
- %R(28) โ Smoother signal for swing trading
Limitations
- Can stay in overbought/oversold territory for extended periods in trending markets
- Very sensitive โ generates many signals, needs confirmation from other indicators
- Best used as a timing tool, not a standalone strategy
