Williams R Complete Guide
Williams %R
What is Williams R?
Developed by Larry Williams, the Williams %R (or Williams Percent Range) is a momentum indicator that measures overbought and oversold levels in a financial market. It functions similarly to the Stochastic Oscillator but is plotted on an inverted scale ranging from 0 to -100. The indicator reflects the level of the close relative to the highest high for the look-back period. A reading between 0 and -20 suggests the asset is overbought, while a reading between -80 and -100 indicates it is oversold. The default parameter is 14 periods, which can be applied to any timeframe. Technically, Williams %R measures the capacity of bulls to close the price near the top of the recent range. If the indicator fails to reach the overbought zone during a rally, it signals weakening momentum. Conversely, if it stays pinned near the top, it confirms a strong uptrend. Traders often use it to find entry points in the direction of the primary trend or to anticipate potential reversals when the indicator exits extreme zones. Because it is highly sensitive to price action, it is best used in conjunction with trend-following tools like moving averages to filter out false signals during strong trending phases.
Signal Types
Overbought Exit
When the indicator moves from above -20 to below -20, it suggests a potential bearish reversal or pullback.
Oversold Exit
When the indicator moves from below -80 to above -80, it suggests a potential bullish reversal or bounce.
Failure Swing
If the indicator fails to reach the overbought zone (-20) during a price peak, it indicates weakening upward momentum.
Momentum Confirmation
Consistent readings near 0 to -10 confirm a strong uptrend; readings near -90 to -100 confirm a strong downtrend.
Related Indicators
FAQ
What is the difference between Williams %R and the Fast Stochastic Oscillator?
They are essentially the same, but Williams %R is inverted and uses a 0 to -100 scale, while Stochastic uses 0 to 100. Williams %R = (Highest High - Close) / (Highest High - Lowest Low) * -100.
Does an overbought reading mean I should sell immediately?
No. In a strong uptrend, the indicator can stay in the overbought zone for a long time. It is often better to wait for the indicator to cross back below -20 before considering a sell signal.
Can I change the default 14-period setting?
Yes. Shortening the period makes the indicator more sensitive (more signals, more noise), while lengthening it makes it smoother and less reactive to minor price fluctuations.
Parts of this page (FAQ, introductions) are AI-assisted. Core data and statistics are algorithmically computed. All pattern definitions are human-reviewed.
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Data source: EODHD · © 2026 KlineVision AI