Technical & Chart AnalysisWilliams Percent R%R
Williams %R
A momentum oscillator scaled from 0 to -100 showing where the close sits relative to the recent high-low range.
What Williams %R means
Williams %R, created by Larry Williams, shows where the current close sits within the high-low range of a lookback period, conventionally 14. It is calculated as the highest high minus the close, divided by the highest high minus the lowest low, multiplied by -100. The result is a negative scale running from 0 at the very top of the range to -100 at the very bottom. Mathematically it is the inverse of raw stochastic %K, so the two indicators trace the same shape on differently signed axes.
Readings above -20 are conventionally described as overbought and readings below -80 as oversold, with the midpoint at -50. Because there is no smoothing in the standard formula it is a fast, noisy indicator, so many traders apply their own moving average to it or use it only for divergence and for momentum failure signals where the index reaches an extreme and then fails to retest it. As with all range-scaled oscillators, %R saturates near 0 during strong uptrends and can stay there for many periods.
Worked example
With a 14-period GBP/USD high of 1.2760, a low of 1.2660 and a close of 1.2745, Williams %R reads -15, an overbought value that in a strong uptrend may simply reflect closes near the top of the range.
Related terms
- OscillatorAn indicator that fluctuates around a centre line or within fixed bounds, used mainly to gauge momentum extremes.
- Stochastic OscillatorAn oscillator showing where the close sits within the recent high-low range, plotted as %K and %D on a 0 to 100 scale.
- OverboughtA condition in which an oscillator sits at a high extreme after a rapid advance, indicating stretched momentum rather than a sell signal.
- OversoldA condition in which an oscillator sits at a low extreme after a rapid decline, indicating stretched momentum rather than a buy signal.
- MomentumThe rate at which price is changing, used to judge whether a move is accelerating or losing force.
Frequently asked questions
What does Williams %R mean in forex trading?
A momentum oscillator scaled from 0 to -100 showing where the close sits relative to the recent high-low range.
How does Williams %R work in practice?
Readings above -20 are conventionally described as overbought and readings below -80 as oversold, with the midpoint at -50. Because there is no smoothing in the standard formula it is a fast, noisy indicator, so many traders apply their own moving average to it or use it only for divergence and for momentum failure signals where the index reaches an extreme and then fails to retest it. As with all range-scaled oscillators, %R saturates near 0 during strong uptrends and can stay there for many periods.
What is an example of Williams %R?
With a 14-period GBP/USD high of 1.2760, a low of 1.2660 and a close of 1.2745, Williams %R reads -15, an overbought value that in a strong uptrend may simply reflect closes near the top of the range.
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