Indicator: What Is Williams %R? Reading the -0 to -100 Scale

Williams %R (often written "%R" or "Williams Percent Range") is a momentum oscillator developed by Larry Williams that measures where the current close sits within the recent high-low range. It answers almost the same question as the Stochastic Oscillator, but with a different scale and no smoothing — which makes it faster, and a useful second opinion if you already use RSI or Stochastic.

How It's Calculated

For a chosen lookback period (14 by default), the formula is:

%R = (Highest High − Close) ÷ (Highest High − Lowest Low) × −100

The negative sign is why the scale runs from 0 down to -100 instead of the more familiar 0-to-100 you'd get from RSI or Stochastic. A reading near 0 means the close is sitting right at (or near) the highest high of the lookback period — about as strong as price can look. A reading near -100 means the close is sitting right at the lowest low — about as weak as it can look. Everything in between is a straight percentage of where the close falls inside that range.

Reading the Scale: Overbought and Oversold

• -20 to 0 — considered Overbought. Price is closing very near the top of its recent range.
• -80 to -100 — considered Oversold. Price is closing very near the bottom of its recent range.

These thresholds mirror Stochastic's 80/20 zones, just flipped onto the negative scale. The middle ground, roughly -20 to -80, is where the indicator spends most of its time and carries little signal on its own — the zones near the extremes are where %R earns its keep.

Entry Conditions

• BUY — %R turns up out of the oversold zone (was below -80, now rising back above it), suggesting the sell-off has run out of steam.
• SELL — %R turns down out of the overbought zone (was above -20, now falling back below it), suggesting the rally has run out of steam.

Because %R has no built-in smoothing, the turn itself (not just touching -80 or -20) is the signal — price can sit pinned in an extreme zone for a while during a strong move, and acting on the first touch rather than the turn is a common source of early, wrong entries.

Williams %R vs Stochastic

The two indicators use the same underlying inputs — highest high, lowest low, and close over a lookback period — which is why their shapes on a chart often look like mirror images of each other. The differences that actually matter in practice:

• Scale — Stochastic reads 0 to 100 (higher = stronger), %R reads 0 to -100 (closer to zero = stronger). Easy to mix up when switching between the two.
• Smoothing — Stochastic plots two lines (%K and %D, where %D smooths %K), giving you a crossover signal. %R plots a single, unsmoothed line, so it reacts faster but has no internal crossover to confirm a turn.
• Speed — because there's no smoothing, %R tends to reach its extremes slightly earlier than Stochastic on the same data, at the cost of more noise.

If you want an earlier warning and are comfortable filtering out extra false signals yourself, %R is the faster tool. If you'd rather trade the %K/%D crossover for a built-in confirmation step, Stochastic is the better fit. Running both side by side mostly tells you the same thing twice, since they're built from nearly identical math.

Choosing the Lookback Period

The default 14-period setting balances responsiveness against noise, but it isn't the only sensible choice:

• Shorter periods (5-9) — react faster to short-term swings, useful for scalping or very short timeframes, but the line whipsaws in and out of the extreme zones more often, generating more false turns.
• Longer periods (21-28) — smoother, fewer trips into the extreme zones, better suited to swing trading on higher timeframes where you want fewer, higher-conviction signals.

There's no universally "correct" period — it's a trade-off between catching a turn early and avoiding noise, and the right setting depends on the timeframe and how much confirmation you're willing to wait for.

Combining Williams %R with Other Tools

Like any oscillator, %R measures momentum, not trend direction, so it works best alongside something that establishes context first:

• Trend filter — only take oversold buy signals while price is above a longer-period Moving Average, and overbought sell signals while price is below it, so you're trading with the dominant trend rather than against it.
• Structure — combine a turn out of an extreme zone with a nearby support or resistance level for confluence, rather than acting on the oscillator in isolation.
• Divergence — as with RSI and Stochastic, watch for price making a new high or low that %R doesn't confirm; it's an early warning to tighten management, not a standalone entry signal.

A Word of Caution

%R's speed cuts both ways: in a strong trending market, it can pin near -100 or 0 for extended stretches and fire repeated "reversal" signals while price keeps moving in the trend's direction — the same trap that catches traders using RSI or Stochastic in a strong trend. Check market structure before trusting an extreme-zone signal, and treat %R as one input alongside trend and structure rather than a trigger on its own.

Download the Indicator

This custom indicator plots %R with automatic alerts when it turns out of the overbought or oversold zone. It's available for both MetaTrader 4 and MetaTrader 5 below.

How to Install — MetaTrader 4

1. Download the williams-r-alert.mq4 file below.
2. Open MetaTrader 4 → click File → Open Data Folder.
3. Place the file in the MQL4/Indicators folder.
4. Restart MetaTrader 4, then drag the indicator from the Navigator window onto the chart.

How to Install — MetaTrader 5

1. Download the williams-r-alert.mq5 file below.
2. Open MetaTrader 5 → click File → Open Data Folder.
3. Place the file in the MQL5/Indicators folder.
4. Restart MetaTrader 5, then drag the indicator from the Navigator window onto the chart.

Both files are source code — open and review the full code before using it, for your own safety.