Williams %R
By LuxAlgoApr 13, 2020
Williams %R plots where the current close sits relative to the highest high and lowest low of a lookback window, on an inverted 0 to -100 scale: readings near 0 mean closes at the very top of the recent range, near -100 the very bottom. The default length is 14, and this is the standard implementation of Larry Williams' %R with the classic settings: dashed reference lines at the -20 overbought and -80 oversold levels, with the area between them shaded.
The line is plotted raw, with no smoothing and no signal line, so it registers a shift in range position on the bar it happens, at the price of more noise.
How to Trade the Williams %R?
- %R above -20: overbought, closes near the ceiling of the lookback range. In a sideways market a fade condition; in a trend, evidence of strength.
- %R below -80: oversold, closes pinned to the floor of the range, the mirror image.
- Crosses back out of a zone: the hook back below -20 or above -80 is the classic timing trigger, acting as the extreme unwinds.
- Failures to reach a zone: a rally that no longer pushes %R above -20 shows closes stalling short of the range top, fading momentum.
Williams %R Settings
- Length (default 14): the lookback for the highest high and lowest low. Shorter windows visit the extremes constantly; longer ones make zone readings rarer.
- Source (default close): the series located within the range.
- Overbought Level (default -20) and Oversold Level (default -80): the zone boundaries. The dashed lines, shaded zone, and alerts all follow these inputs.
Williams %R Alerts
Four alert conditions cover both boundaries: Overbought Enter and Overbought Exit fire as %R crosses above and back below the overbought level; Oversold Enter and Oversold Exit track the same transitions at the oversold level.
Frequently Asked Questions
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