Williams %R
Williams %R is an inverted version of the stochastic, ranging from -100 (oversold) to 0 (overbought).
What It Measures
Momentum extremes: how far the close is below the recent highest high.
The Math (Simplified)
%R = -100 × (Highest High(N) - Close) / (Highest High(N) - Lowest Low(N)). Close at the top gives 0, at the bottom gives -100.
Default Inputs & Tuning
14 days is standard. Traders watch -80 (oversold, potential bounce) and -20 (overbought) as thresholds.
When It Works (Market Edge)
Mean-reversion in ranges: buying when %R crosses above -80 and selling when it crosses below -20 can time swings.
When It Fails
Trending markets: %R stays pinned near 0 in rallies or near -100 in selloffs, giving repeated false reversal signals.
Common Myths
Myth: Williams %R predicts tops and bottoms exactly.
Truth: It flags extremes, not reversals. Price can remain at 0 or -100 while the trend continues.
Loading...