What is Williams %R? Complete Guide for Indian Investors & Traders
Williams %R is a momentum oscillator that measures where the latest close sits relative to the highest high of a lookback period, typically 14 sessions. It runs on an inverted scale from 0 to −100. Readings near 0 mean closes near the period's highs; readings near −100 mean closes near its lows.
If Page Industries closed at ₹42,000 with a 14-day high of ₹42,400 and low of ₹40,400, %R reads −20. The close sits in the top fifth of its recent range, showing buyers finishing sessions strongly.
%R = (Highest High − Close) / (Highest High − Lowest Low) × −100
How is Williams %R interpreted?
Readings above −20 are conventionally called overbought, meaning closes are pinned near range highs, while readings below −80 are called oversold. As with RSI, these are condition labels, not commands: strong trends keep %R pinned at the extremes for long stretches. The exit from an extreme zone, rather than the entry into it, is what traders typically watch.
How does %R differ from the stochastic oscillator?
They measure the same thing from opposite ends: stochastic compares the close to the period low, %R to the period high, making them mirror images on inverted scales. %R is typically plotted without a signal line, keeping it rawer and faster. Traders choose between them by preference; using both adds no new information.
To apply Williams %R in real markets, open a free demat account and explore charts inside the app. Derivatives traders can also use it while planning futures and options trades.
Technical analysis involves interpretation. The same chart can be read differently by different traders. Always combine multiple tools and manage risk before acting on any signal.
Frequently Asked Questions
Why is the Williams %R scale negative?
The formula measures distance below the period high, expressed as a negative percentage. It is a historical convention from Larry Williams' original design. The information is identical to a 0-100 scale flipped.
What does %R staying above -20 for weeks mean?
Closes keep landing near the highs of the rolling range, the signature of a strong uptrend. It reflects persistent strength rather than an imminent reversal. Trend context decides how to respond.
Which settings suit Williams %R?
The 14-period default is standard; shorter periods like 10 react faster for intraday use. Longer settings smooth the signal for positional traders. Stick with one setting for comparable readings.
Can %R divergence be traded?
Yes, price making new highs while %R prints lower peaks shows fading close-strength. It works like RSI divergence and needs the same price confirmation. Divergences at range extremes matter most.
Is Williams %R useful alongside RSI?
They overlap heavily since both measure momentum, so combined use adds little. Pairing %R with trend or volume tools is more productive. StockkAsk can suggest complementary indicators for the setup you trade.
Investments in securities market are subject to market risks. This article is for educational purposes only and does not constitute investment advice.
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