How to Use Williams %R (Williams Percent Range)

Babypips Elementary - Grade 5

What is the Williams Percent Range (Williams %R)?

A momentum indicator/oscillator that shows where the last closing price is relative to the highest and lowest prices of a given period.

What represents the scale range for the Williams %R indicator?

0 to -100.

Which reading on the Williams %R indicates an 'Overbought' market?

Readings above -20 (between -20 and 0).

Which reading on the Williams %R indicates an 'Oversold' market?

Readings below -80 (between -80 and -100).

How does Williams %R compare to the Stochastic indicator?

It is considered a more sensitive version of Stochastic, but inverted.

What is the specific calculation difference between Williams %R and Stochastic?

Stochastic uses the lowest price in a time range to pinpoint position, while Williams %R uses the highest price.

What happens if you invert the Williams %R line?

It becomes the exact same line as the Stochastic %K line.

Does an 'Overbought' or 'Oversold' reading guarantee a reversal?

No. It simply means the price is near the highs (overbought) or lows (oversold) of its recent range.

How does Williams %R differ from RSI regarding trend strength?

RSI uses the mid-point (50) to determine strength, while Williams %R uses extreme levels (-20 and -80) for cues.

How can Williams %R identify a loss of momentum?

When price tries to extend a trend but the %R fails to reach new highs or lows, it suggests momentum is running out.

What nickname do superfans sometimes call the Williams %R?

The Ultimate Oscillator