What is the scale for Williams %R?

It is plotted on an inverted scale from 0 to -100. Overbought is between 0 and -20, while oversold is between -80 and -100.

How does it differ from the Stochastic oscillator?

They are very similar, but Williams %R uses a different calculation and doesn't use the smoothing that Stochastics typically applies, making it faster.

Can it predict reversals?

It is known for its ability to signal 'momentum failure' — when it fails to reach an extreme level despite price doing so.

Which timeframe is best?

It works on all timeframes, but like all oscillators, it is more reliable on H1 and higher.

Education · Indicators

Williams %R: Anticipating the turn.

Developed by Larry Williams, the %R is a fast-moving momentum indicator that reflects the level of the close relative to the high-low range.

Reading the extremes.

A reading above -20 indicates the market is near its recent highs (overbought). A reading below -80 indicates it is near its recent lows (oversold).

Being overbought isn't a sell signal by itself; the indicator can stay at the top during a strong trend.

Momentum failure setups.

Look for price to make a new high while %R fails to break above -20.
Wait for the indicator to cross back below -20 to confirm a bearish entry.
Opposite applies for bullish setups: wait for a cross above -80.
Always trade in the direction of the dominant market structure.

Price vs. Range.

Because it measures the close against the range, %R is exceptionally good at finding where price is 'stretching' too far from its recent average.

FAQ

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