# Williams %R > Williams %R shows where the close sits within the recent range on a 0 to minus 100 scale. Learn the formula, overbought and oversold levels and trading uses. Source: https://learn.tradelabsai.com/indicators/williams-r/ Track: Indicators · Level: Beginner · Updated: 2026-10-03 Publisher: TradeLabs AI (https://tradelabsai.com). Education, not financial advice. Cite as: TradeLabs Learn, "Williams %R", https://learn.tradelabsai.com/indicators/williams-r/ Williams %R, often called Williams Percent Range, is a momentum oscillator developed by trader Larry Williams. It shows where the latest close sits relative to the highest high and lowest low of a recent period. It is closely related to the stochastic oscillator but is plotted on an inverted scale from 0 to minus 100. Readings near 0 mean the close is near the top of the range; readings near minus 100 mean it is near the bottom. ## The formula ``` %R = (Highest high − Close) ÷ (Highest high − Lowest low) × (−100) ``` The default lookback is 14 periods. **Example: Calculating Williams %R** Over 14 days, the highest high is $120 and the lowest low is $100. Today's close is $116. %R = (120 − 116) ÷ (120 − 100) × (−100) = 4 ÷ 20 × (−100) = minus 20. The close is near the top of the range, an overbought reading. Williams %R is mathematically the fast stochastic %K shifted by 100: a stochastic reading of 80 equals a %R of minus 20. The two indicators give the same information; %R is simply unsmoothed and inverted. See [Stochastic Oscillator](https://learn.tradelabsai.com/indicators/stochastic-oscillator/). ## Overbought and oversold | %R | Interpretation | |---|---| | 0 to minus 20 | Overbought: closing near the top of the recent range | | minus 20 to minus 80 | Middle of the range | | minus 80 to minus 100 | Oversold: closing near the bottom of the recent range | As with all oscillators, overbought does not mean price must fall. In strong uptrends, %R can stay near 0 for long periods, and Williams himself noted that strong markets often stay overbought. ## How traders use Williams %R ### Momentum confirmation When %R repeatedly reaches near 0 during a rally, buyers are consistently closing price near the highs, a sign of strength. Failure to reach the overbought zone on a new price high can warn that momentum is fading. ### Failure swings and exits from extremes A common signal is %R moving back out of an extreme zone: from below minus 80 back above it, suggesting selling pressure is ending, or from above minus 20 back below it, suggesting buying pressure is ending. Combined with support and resistance, these can time entries. See [Support and Resistance](https://learn.tradelabsai.com/price-action/support-and-resistance/). ### Short term mean reversion Because it is unsmoothed and fast, %R is popular in short term mean reversion strategies, for example buying pullbacks in an uptrend when %R drops below minus 80, with tight time based exits. See [Mean Reversion](https://learn.tradelabsai.com/strategies/mean-reversion/). **Example: A pullback in an uptrend** An index ETF is above its 200 day moving average. After three down days, the 10 period %R falls to minus 92. The next day it rises to minus 70 as the ETF closes higher. A short term trader buys at the close and plans to exit when %R returns above minus 20 or after five days, whichever comes first, with a stop below the recent low. ## Settings - **14 periods:** the standard. - **Shorter (such as 2 to 10):** used for short term trading, very sensitive. - **Longer:** smoother and fewer signals. ## Limitations - **Noisy:** unsmoothed readings jump around, producing many signals. - **Trend dependent:** overbought and oversold signals fail often in strong trends. - **Redundant with the stochastic:** using both adds little new information. ## Common mistakes - **Shorting every reading near 0** in an uptrend. - **Forgetting the inverted scale** and misreading signals. - **Using %R alone** without trend or level context. ## Frequently asked questions ### What does Williams %R show? Where the current close sits within the recent high to low range, on a scale from 0 (top) to minus 100 (bottom). ### What is the difference between Williams %R and the stochastic oscillator? They use the same calculation idea. Williams %R is plotted on an inverted scale and is not smoothed, while the stochastic usually includes smoothing and a signal line. ### What are overbought and oversold levels for Williams %R? Above minus 20 is generally overbought and below minus 80 is generally oversold. ## Sources - Wikipedia, [Williams %R](https://en.wikipedia.org/wiki/Williams_%25R) ## Continue learning - Next lesson: [Rate of Change and Momentum](https://learn.tradelabsai.com/indicators/rate-of-change-and-momentum/) - Previous lesson: [CCI (Commodity Channel Index)](https://learn.tradelabsai.com/indicators/cci/) - Related: [CCI (Commodity Channel Index)](https://learn.tradelabsai.com/indicators/cci/): The CCI measures how far price is from its average relative to normal deviation. Learn the formula, the plus and minus 100 levels, trend and reversal strategies. - Related: [Stochastic Oscillator](https://learn.tradelabsai.com/indicators/stochastic-oscillator/): The stochastic oscillator shows where the close sits within the recent high low range. Learn %K and %D, overbought and oversold levels, crossovers and divergence. - Related: [RSI (Relative Strength Index)](https://learn.tradelabsai.com/indicators/rsi/): The RSI measures the speed and size of recent price moves on a 0 to 100 scale. Learn the formula, overbought and oversold levels, divergence and how to trade it. - Related: [Range Trading](https://learn.tradelabsai.com/strategies/range-trading/): Range trading buys near support and sells near resistance while price moves sideways. Learn how to identify ranges, time entries and exit when a range breaks. - Related: [Momentum Trading](https://learn.tradelabsai.com/strategies/momentum-trading/): Momentum trading buys assets that are rising fastest and sells those falling fastest. Learn the research, intraday and multi month methods and momentum crashes.