Williams %R: Indicator Guide
Williams %R shows where the latest close landed inside its recent high-to-low range, on a scale from 0 down to −100. Readings near 0 are at the top of the range and readings near −100 are at the bottom. It is a flipped version of the Stochastic Oscillator, and it describes a position, not a direction.
What It Shows
Where does today's close sit between the highest high and the lowest low of the last 14 days? That is the one question Williams %R answers. A close at the top of the range reads 0, a close at the bottom reads −100 and a close halfway up reads −50.
The numbers are negative, which makes them easy to read backwards. One rule keeps it straight: closer to 0 means a stronger close, and closer to −100 means a weaker one.
How It's Calculated
Take the highest high and the lowest low over the last 14 days. Subtract today's close from the highest high, divide by the full distance between the high and the low, and multiply by −100.
Try it with made-up prices: the 14-day high is $60, the low is $40 and today's close is $55. (60 − 55) ÷ (60 − 40) × −100 = −25. The close sits in the upper quarter of the range.
The result never leaves the 0 to −100 band, because a close cannot land above the highest high or below the lowest low.
How to Read It
Start with these three readings. Each one describes where the close sits; none predicts what comes next.
- The two zones. Above −20 is called overbought, where the close is near the top of its range. Below −80 is called oversold, near the bottom. These are labels for position, not predictions.
- A mirror of Stochastic. Williams %R carries the same information as raw %K on the Stochastic Oscillator, on a flipped scale. Rapunzl's chart Stochastic smooths %K by default (Smooth %K is 3), so the two lines match only when Smooth %K is set to 1. Many traders pick one of the two.
- Trend first. The same oversold reading means something different in a falling trend than in a rising one, so check the direction of the bigger move first.
Where It Misleads
The negative scale is easy to misread, so check which end is which before you read a chart. A reading of −10 is a strong close, even though the number looks like a bad one, and −90 is a weak one.
Like every range oscillator, Williams %R can sit near 0 or −100 for a long stretch when a stock trends hard, so an "overbought" label can hang around while the price keeps climbing. A short period also makes the line very twitchy.
Settings in Rapunzl
| Setting | Default | Range |
|---|---|---|
| Period | 14 | 2 to 400 |
Period is the number of days in the high-to-low range. A shorter period swings from end to end more often. A longer period is slower and calmer. If you switch the chart to 15-minute candles, the 14 stands for 14 candles of that size.
Try It in Rapunzl
Pick Candlestick or OHLC on a stock's chart first, because Williams %R needs each day's high, low and close. Then open Customize Chart → Chart Indicators → Advanced Indicators and add Williams %R. It draws in its own panel with guide lines at −20 and −80. Add the Stochastic Oscillator beside it from the same section. Set its Smooth %K to 1 and its %K line becomes the mirror image of Williams %R; at the default of 3 it is a smoother version. Adding Williams %R to a chart is part of Rapunzl Premium.
In Rapunzl's Stock Scanner, "Williams %R 14" is a field in the Momentum group: above −20 is overbought and below −80 oversold. It accepts values from −100 to 0, and it is free. Set it below −80 on any idea, see which stocks remain, then open their charts. A stock on that list is a stock to study, not a pick; oversold only describes where the close sits.
A 15-Minute Class Activity
Flip the Scale. Students work in pairs with a pencil, a strip of paper and a calculator. All prices below are made up.
- 3 minutes. Draw a 14-day range on the board with a high of $60 and a low of $40. Each pair marks $40 at the bottom of its strip and $60 at the top, then writes a 0 to −100 scale down the left edge. Ask where closes of $58, $50 and $42 would sit.
- 5 minutes. Pairs calculate Williams %R for each close and check it against the strip. The answers are −10, −50 and −90.
- 4 minutes. On the right edge of the strip, pairs write a 0 to 100 scale and calculate Stochastic %K for the same closes: (close − low) ÷ (high − low) × 100. The answers are 90, 50 and 10. Students see that %R equals %K minus 100.
- 3 minutes. Exit ticket: if a stock rises for three weeks, what will Williams %R read, and why does an overbought label not mean it will fall?
Related Indicators
- Stochastic Oscillator: the same measure on a 0 to 100 scale.
- RSI: another 0 to 100 momentum study, built on price changes instead of the range.
- Commodity Channel Index: a momentum study with no fixed ceiling.
- Money Flow Index: a bounded study that adds volume to the picture.
Frequently Asked
Questions
It shows where the latest close sits between the highest high and lowest low of the last 14 days. 0 is the top of the range and −100 is the bottom.
The scale runs from 0 at the top of the range down to −100 at the bottom, which is the Stochastic scale turned upside down. A reading close to 0 is the strong end.
Above −20 is called overbought and below −80 is called oversold. The words describe where the close sits in its range and are not forecasts.
It carries the same information as the raw Stochastic %K on a flipped scale, so many readers pick one of the two. Rapunzl's chart Stochastic smooths %K by default, so its line matches only when Smooth %K is set to 1.
On the chart, Williams %R is a Premium study. The "Williams %R 14" field in Rapunzl's Stock Scanner is free.
Teach Range Reading With Rapunzl
Students who read ranges well tend to read charts well. Request a demo to put Rapunzl in front of your class, or share our parents page with a family that wants to explore together.
Indicators, patterns and examples in this article are for education and are not investment advice or a recommendation to buy or sell any security.
By Clarissa Collins, Curriculum Designer at Rapunzl.