Williams %R explained: the setting, the −20 and −80 levels and how to use it
Williams %R is the Stochastic turned upside down: where the close sits in the recent range, measured down from the top on a scale that runs from −100 to 0. This guide is what that number is, what its one setting changes, and the comparisons you can build a SixOne8 condition from.
What Williams %R measures
Take the last N bars — fourteen by default — and find the highest high and the lowest low among them. Williams %R is how far the latest close sits below that high, as a share of the whole range, written as a negative number. A close at the very top of the range reads 0; a close at the very bottom reads −100; a close halfway reads −50.
If that sounds familiar, it is: the arithmetic is the raw, unsmoothed Stochastic %K, measured from the other end. A Stochastic reading of 80 and a %R of −20 describe the same close. Readings above −20 are conventionally called "overbought" and below −80 "oversold". Those are names for regions of the scale, not statements about what happens next — in a steady rise the close sits near the top of the range bar after bar, and %R stays above −20 for as long as that lasts. When the high and low of the window are the same, the app reads −50, the middle, rather than claim an extreme.
Williams %R settings
There is one: the period, how many bars the high-low range covers. Fourteen is the default. A shorter period reaches 0 and −100 constantly; a longer one spends more of its time in the middle of the scale. As with every indicator here, it is counted in bars of the timeframe the condition reads: %R(14) on the 4-hour chart covers fourteen four-hour bars, fifty-six hours of trading.
There is no smoothing and no signal line. If you want a smoothed version of the same measurement with a second line to cross, that is the Stochastic.
How to use Williams %R in a strategy
These are the comparisons SixOne8 offers for Williams %R, in the builder's own words.
- Greater than / less than a level. True for every bar the reading is on that side of the level. A state, so an alert fires when the strategy first becomes satisfied and not again while it stays there. The level defaults to −20 and must sit between −100 and 0.
- Crosses above / crosses below a level. True only on the bar where the reading moves through the level. A moment rather than a state — the usual choice for the condition that should trigger the strategy.
- Rising / falling. The reading is higher, or lower, than it was the bar before.
Williams %R(14) on 4h · crosses above · −80
Read it as a sentence: on the 4-hour chart, the fourteen-bar Williams %R has just moved up through −80, out of the bottom fifth of its range. That is what the scanner evaluates at each 4-hour close, and what the alert will say if it is the condition that completed the strategy.
The negative scale catches people out
Because the numbers are negative, "greater than" means closer to zero, which is closer to the top of the range. "Greater than −20" is the overbought region; "less than −80" is the oversold one. The sign is the most common mistake when a rule is copied from a Stochastic setup: a Stochastic level of 20 is a %R level of −80, not −20. There are no zero-line comparisons on this indicator for the same reason — zero is its ceiling, not its centre.
Like any range reading, it fires often on a fast timeframe. Most strategies pair it with a slower condition that describes the context, such as price above a long moving average, so %R decides the moment and the other condition decides whether that moment counts.
Does Williams %R work on your market?
Run an entry check. It will tell you whether, on the market you care about, the moments this condition fired moved any differently from a random moment over the history tested. That is a fact about the past on that market, and it is the only kind of fact a test here produces.