Question 1

What is Williams %R?

Accepted Answer

Williams %R is a momentum oscillator developed by Larry Williams. It measures overbought and oversold levels, oscillating between 0 and -100. It is essentially an inverted Stochastic Oscillator and is particularly useful for identifying potential reversal points.

Question 2

How it works

Accepted Answer

Williams %R compares the current close to the highest high over a lookback period: ``` %R = ((Highest High - Close) / (Highest High - Lowest Low)) * -100 ``` When %R is near 0, the close is near the period high. When near -100, the close is near the period low.

Question 3

Key levels

Accepted Answer

- **-20 to 0** — Overbought zone. Price is near recent highs. - **-100 to -80** — Oversold zone. Price is near recent lows. - **-50** — Midpoint, often acts as dynamic support/resistance.

Question 4

Buy signals

Accepted Answer

- %R crosses above -80 from below (leaving oversold zone) - %R rises from -100 area with increasing volume - Bullish divergence: price makes lower low, %R makes higher low

Question 5

Sell signals

Accepted Answer

- %R crosses below -20 from above (leaving overbought zone) - %R falls from 0 area with decreasing volume - Bearish divergence: price makes higher high, %R makes lower high

Question 6

Parameters

Accepted Answer

| Parameter | Default | Description | |-----------|---------|-------------| | Period | 14 | Lookback period for highest high / lowest low |

Question 7

Example conditions

Accepted Answer

| Condition | Meaning | |-----------|---------| | `WILLIAMSR(14) -20` | Williams %R is in overbought zone | | `WILLIAMSR(14) cross_over -80` | Exiting oversold (buy signal) | | `WILLIAMSR(14) cross_under -20` | Exiting overbought (sell signal) |

Question 8

Tips

Accepted Answer

- Williams %R and Stochastic %K move inversely but convey the same information - Best used in ranging markets; in strong trends it can stay overbought/oversold - Combine with support/resistance levels for higher probability trades - A 14-period setting works well for daily charts; use shorter for intraday - Look for divergences as the strongest signal type