GlossaryWilliams %R

Williams %R

Williams %R shows how far the close sits below the highest high of recent candles, measured against the whole range. The scale runs from 0 (close at the high) to −100 (close at the low). Larry Williams developed it to identify overbought and oversold phases.

Calculation

$C_t$ is the close, $H_t$ the high, $L_t$ the low of a candle and $n$ the Length.

Highest high and lowest low of the last $n$ candles, including the current one:

\mathrm{HH}_t = \max_{0 \le i < n} H_{t-i}, \qquad \mathrm{LL}_t = \min_{0 \le i < n} L_{t-i}

\%R_t = -100 \cdot \frac{\mathrm{HH}_t - C_t}{\mathrm{HH}_t - \mathrm{LL}_t}

If the window has no range ( $\mathrm{HH}_t = \mathrm{LL}_t$ ), there is no value. The first value appears on candle $n$ .

Note %R is the unsmoothed Stochastic, just shifted down by 100:

\%R_t = \%K^{\text{raw}}_t - 100

. Both say the same thing, %R without smoothing and without a signal line.

How to read it

The curve is red from −20 up, green at −80 and below, gray in between. Reference lines sit at −80, −50 and −20, and the zones at the top and bottom are shaded.

Overbought: Above −20, the price closes in the top fifth of its range.
Oversold: Below −80, it closes in the bottom fifth.
Return from the zone: A fall from above −20 back below −20, or a rise from below −80 back above −80, counts as a hint that momentum is fading.
−50: The middle of the range. Above it, the price closes in the upper half; below it, in the lower half.
In a trend: In a strong trend, %R often stays in one zone for a long time. An overbought value is then more a sign of strength than a sell signal.

Settings

Setting	Default	Effect
Length	14	Number of candles $n$ for the high and low of the range (2–100).

Limitations

Without smoothing, %R is very choppy and on short intervals often jumps between zones.
It only measures the position within the range, not the range's size. After a quiet phase, small moves are enough for a change from one zone to the other.