Williams %R

A momentum oscillator that shows where the latest close sits within the recent high-low range.

What it is

Williams %R (Williams Percent Range), developed by Larry Williams, is a momentum oscillator that measures where the current close falls relative to the highest high and lowest low over a chosen lookback period (commonly 14 bars). It moves on an inverted scale from 0 down to -100: readings near 0 mean the close is at the top of the recent range, and readings near -100 mean it is at the bottom. It is closely related to the Fast Stochastic oscillator, differing mainly in its inverted scale. Like all indicators, it describes past price behavior and is not predictive; trading always carries risk of loss.

How it works

For each bar, the indicator looks back over a set number of periods and finds the highest high and lowest low in that window. It then measures how far the most recent close is from the top of that range, expressed as a percentage of the full range. If the close equals the highest high, the value is 0; if it equals the lowest low, the value is -100; a close in the middle of the range gives about -50. The formula is: %R = (Highest High - Close) / (Highest High - Lowest Low) x -100. Because the scale is flipped, the line sits near the top of the panel during strength and near the bottom during weakness.

How traders read it

• Traders often read values above -20 as 'overbought' (close near the top of the recent range) and below -80 as 'oversold' (close near the bottom) - these describe range position, not buy/sell instructions.
• Some watch for the line crossing back below -20 or back above -80 as a way to gauge when a stretched condition is easing, rather than reacting the instant a level is touched.
• In strong trends %R can stay pinned in an extreme zone for long stretches, so persistent extremes are sometimes read as trend strength rather than an imminent reversal.
• Divergence between price and %R (price makes a new high or low that %R does not confirm) is treated only as a hint of weakening momentum, never a guarantee.
• Because the scale is inverted (0 is strong, -100 is weak), traders are careful not to confuse the visual direction with other oscillators.
• The midline near -50 is sometimes used as a rough read of whether the close sits in the upper or lower half of its recent range.

Common settings

Default length is 14 periods. Common reference lines are -20 (upper) and -80 (lower); some traders use -10/-90 for stricter extremes. Shorter lengths (e.g., 7-10) react faster but are noisier; longer lengths (e.g., 21-28) are smoother but lag more.

Strengths

• Simple, bounded 0 to -100 scale makes range position easy to see at a glance.
• Reacts quickly to price changes, so it reflects shifts in short-term momentum promptly.
• Built into most platforms (Pine: ta.wpr), so it needs no custom calculation.
• Closely related to the Stochastic oscillator, giving traders a familiar framework for reading extremes and divergence.

Pitfalls to watch

• It is bounded and reactive, so it often hits its extremes (0 and -100) and can stay pinned there during strong trends, producing many premature 'overbought' or 'oversold' readings that need not lead to a reversal.
• It is not predictive. An extreme reading describes current range position only; it says nothing about what price will do next, and all trading carries risk of loss.
• Used alone it can generate frequent misleading readings in choppy or trending conditions; many traders combine it with trend or volume context rather than acting on the oscillator in isolation.
• The chosen lookback length heavily changes behavior: shorter periods are noisier and hit extremes more often, longer periods are smoother but slower to react.
• The inverted 0 to -100 scale is easy to misread - confusing the direction can lead to interpreting strength as weakness.

Pine v6 example

//@version=6
indicator("Williams %R", overlay = false)

length = input.int(14, "Length", minval = 1)
percentR = ta.wpr(length)

plot(percentR, "Williams %R", color = color.blue)
hline(-20, "Overbought", color = color.gray, linestyle = hline.style_dashed)
hline(-80, "Oversold", color = color.gray, linestyle = hline.style_dashed)

Pro tip: Because %R spends a lot of time at its extremes, many traders use it for context alongside trend tools rather than as a standalone trigger - for example, only noting an 'oversold' reading when the broader trend is already up. Treat it as one input among several, and remember no indicator is predictive and all trading carries risk of loss.

Educational only — not financial advice, not a recommendation to trade. No indicator is predictive; trading involves substantial risk of loss.