Williams %R indicator: formula, −20 and −80 levels and how to read it
What is Williams %R?
Williams %R (Williams Percent Range) is a momentum oscillator developed by trader Larry Williams. It shows where the latest close sits relative to the highest high of the last N candles, on a scale from 0 to −100.
A reading near 0 means price closed near the top of its recent range. A reading near −100 means it closed near the bottom. If that sounds like the stochastic oscillator, it is: Williams %R is mathematically the fast stochastic %K flipped upside down and shifted, without the %D smoothing.
How the Williams %R formula works
Find the highest high and lowest low of the last 14 candles. Subtract the close from the highest high, divide by the range, and multiply by −100.
Illustration
Over 14 five-minute NIFTY candles, the high is 24,200 and the low is 24,100. The close is 24,180. %R = (24,200 − 24,180) ÷ 100 × (−100) = −20. Price closed in the top fifth of its range.
The relationship with stochastic: %R = fast %K − 100. A fast %K of 80 equals a %R of −20. Because there is no smoothing, %R reacts to every candle.
How to read Williams %R
- 0 to −20: commonly called overbought; closes near the top of the range.
- −80 to −100: commonly called oversold; closes near the bottom.
- −50: midpoint of the range, used by some as a momentum dividing line.
As with every range oscillator, overbought in a strong trend is a sign of strength, not an automatic reversal. NIFTY can sit between 0 and −20 for many candles during a trending morning.
Failure swings and divergence
When price makes a new high but %R fails to reach its earlier extreme, momentum is weakening. Larry Williams also watched for %R to leave an extreme zone and fail to return, which shows momentum fading.
Best Williams %R settings for NIFTY 5-minute
| Setting | Character |
|---|---|
| 14 | Default; balanced on 5- and 15-minute |
| 10 | Original Williams setting; faster |
| 21 or 28 | Smoother, fewer extremes; suits ranges and swing views |
Some traders smooth %R with a 3- to 5-period moving average to reduce noise, which brings it closer to a slow stochastic. Pick one setting and evaluate it over many sessions.
Williams %R strategy ideas (educational)
1. Pullback in a trend
Define trend first, for example price above a rising 50 EMA or above VWAP. Then watch for %R to drop into −80 to −100 and climb back above −80. The trend gives direction; %R only shows the pullback stretching and recovering.
2. Range edges
On sideways days, %R near 0 at a range top or near −100 at a range bottom has more meaning, especially at pivot or CPR levels.
3. Momentum thrust
When %R jumps from below −80 to above −20 in a few candles, a strong push has occurred. Traders use this as evidence that buyers have taken control of the range, rather than as a reason to fade it.
Real vs weak Williams %R readings
Because %R is unsmoothed, it gives many readings. Most of them are weak. Readings that carry more weight usually agree with the trend, occur at a known level such as the previous day's high or low, and are confirmed by a change in candle structure such as a higher low.
Readings against a strong trend, in the middle of the range, or during the quiet lunch hour are usually noise. A filter like ADX or the higher-timeframe trend removes many of them.
Combining Williams %R with volume and footprint
%R shows where price closed. The footprint chart shows how it got there. If %R is near 0 at a resistance level and the footprint shows aggressive buying not moving price higher, sellers are absorbing it. If %R is near −100 at support and selling volume dries up, sellers may be exhausted.
Comparing with cumulative delta adds a second view: %R making higher highs while delta makes lower highs is a warning that buyers are less aggressive than the closes suggest.
Worked NIFTY example (illustration)
Illustration with plausible numbers. NIFTY trends up from 24,050 to 24,190 by 10:45 and %R(14) stays mostly between 0 and −20. A trader fading those readings would have struggled.
At 11:15 price dips to 24,160 near VWAP and %R falls to −88. At 11:30 a candle closes back at 24,175 and %R rises to −55. The trend is intact and the pullback recovered from VWAP; a trader studying this would mark 24,155 as the level that cancels the idea. Trading F&O carries a high risk of loss; this illustrates behaviour, not a promised result.
Common Williams %R mistakes
- Fading every reading near 0 in a trend.
- Forgetting the scale is negative; −20 is high, −80 is low.
- Using it on 1-minute charts with no smoothing or filter.
- Stacking it with the stochastic, which shows the same information.
- No plan for invalidation and size; see position sizing.
Williams %R across timeframes
A useful habit is to check %R on two timeframes. If the 15-minute %R is in the upper half of its range and the 5-minute %R dips to −80 and recovers, the shorter pullback is happening inside a stronger larger push. If both timeframes are pinned near −100, sellers are dominating on more than one scale, and an oversold reading on the 5-minute chart alone carries little weight. The multi-timeframe analysis guide explains how to line timeframes up without contradicting yourself.
Remember that %R resets its range every candle: when an old high drops out of the 14-candle window, the reading can jump even if price barely moved.
Seeing it on the TradingMarble chart
On the TradingMarble chart you can add Williams %R with your chosen period below NIFTY, BANKNIFTY and F&O charts, alongside the footprint and VWAP. That helps you study whether extreme readings came with real buying or selling. See features.
Williams %R checklist
- What is the trend?
- Is %R in −80 to −100 or 0 to −20, and is it turning?
- Is price at a meaningful level?
- Does volume or delta confirm?
- Where is the invalidation level?
Williams %R is a fast, simple view of where price closes in its range; used with trend and volume it becomes a useful timing aid.
Frequently asked questions
What does Williams %R show?
Williams %R shows where the current close sits within the high-low range of the last N candles, on a scale from 0 to −100. Near 0 means the close is near the range high; near −100 means it is near the range low. It is used to judge momentum and stretched conditions.
What are overbought and oversold levels in Williams %R?
Readings from 0 to −20 are commonly called overbought and readings from −80 to −100 oversold. In trending markets price can stay in these zones for a long time, so they show strength or weakness rather than automatic reversals.
What is the difference between Williams %R and stochastic?
Williams %R equals the fast stochastic %K minus 100, so they carry the same information on a different scale. Stochastic usually adds smoothing and a %D signal line, while %R is unsmoothed and reacts faster. Using both together adds little.
What is the best Williams %R setting for intraday?
The default 14-period setting works well on 5-minute NIFTY and BANKNIFTY charts. Larry Williams originally used 10. Some traders smooth %R with a short moving average to reduce noise.
Why is Williams %R negative?
The formula measures distance from the highest high and multiplies by −100, so readings run from 0 at the top of the range to −100 at the bottom. The negative scale is simply Larry Williams' convention.
Can Williams %R be used for divergence?
Yes. If price makes a higher high but %R makes a lower high, upward momentum is weakening. If price makes a lower low but %R makes a higher low, downward momentum is weakening. Divergence is a warning to watch, not a certain turn.