A fast, sensitive overbought/oversold indicator by Larry Williams.
Start Automating Free βWant to automate this strategy? Try auto-Trading free β no credit card required.
Overview
Williams %R (pronounced "Williams Percent R") is a momentum indicator developed by Larry Williams, similar to the Stochastic Oscillator but inverted. It measures the close price relative to the highest high over a lookback period, scaled from β100 to 0. Values near 0 indicate overbought conditions; values near β100 indicate oversold.
Formula: %R = (Highest High β Close) Γ· (Highest High β Lowest Low) Γ β100
Readings above β20 (near 0) indicate overbought conditions β price is closing near the top of its recent range. Readings below β80 indicate oversold conditions β price is closing near the bottom of its recent range. Buy signals occur when %R crosses back up through β80 from below (exiting oversold territory); sell signals when it crosses back down through β20 from above.
Williams %R is known for its ability to predict reversals 1β2 periods before other oscillators, making it popular for short-term and intraday traders. Like all oscillators, it works best in range-bound markets and should be used with a trend filter in trending environments.
The indicator also generates powerful divergence signals: when price makes a new low but %R fails to reach new oversold readings, bullish divergence suggests a reversal is approaching.
Strategy Code
This is a TradingView Pine Script example for this indicator. Paste it into the TradingView Pine Editor, add it to your chart, and adjust inputs for your market and timeframe.
//@version=6
strategy("Williams %R", overlay=true)
fastLen = input.int(20, "Fast Length")
slowLen = input.int(50, "Slow Length")
fast = ta.ema(close, fastLen)This is a thinkorswim ThinkScript example for this indicator. Open thinkorswim, create a custom study, paste the script, and apply it to your chart.
input length = 14;
def wpr = WilliamsPercentR(length = length);
def buySignal = wpr crosses above -80;
def sellSignal = wpr crosses below -20;
AddOrder(OrderType.BUY_AUTO, buySignal, close, 1, Color.GREEN, Color.GREEN, "WPR Buy");Join thousands of traders who use auto-Trading to execute this strategy automatically, 24/7.
Explore More
All Strategies & Signals