# Williams Percent Range Indicator

## Williams Percent Range

### This lesson will cover the following

• Definition
• Calculation
• Interpretation

Developed by Larry Williams, the Williams %R is a momentum oscillator designed to determine overbought and oversold market conditions. It is best applied to trending markets.

It is exactly the opposite of the Fast Stochastic Oscillator in that it compares the level of the close to the highest high during the lookback period, while the fast stochastic oscillator reflects the level of the close relative to the lowest low. The Williams %R then corrects the inversion by multiplying the result by -100. Thus, the two oscillators readings are an exact match (when used with the same trackback span of course) but their scaling is different.

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Whereas the fast stochastic oscillates between 0 and +100, the Williams %R varies between -100 and 0. The areas between -20 and 0, and -100 and -80 are considered as overbought and oversold, respectively. Another difference between the two is that the Williams %R has no internal smoothing.

The logic behind the Williams %R is that the closer the price is to the highest high of the high-low range tracked within the lookback span, the higher the Williams %R will be in value and vice versa. In case the close touches the highest high, the indicator will hit 0. Conversely, if it drops to the lowest low of the tracked range, it will decline to -100.

On the screenshot below you can see visualized both the Fast Stochastic Oscillator and the Williams %R, tracking back the Williams %Rs default 14 periods of price data. As you can see, they are an exact match.

Here is the formula used to compute the Williams %R value:

%R = (Highest High – Close) / (Highest High – Lowest Low) x (-100), where:

– Close is the closing price for the current period

– Highest High is the highest price reached during the lookback period

– Lowest Low is the lowest price touched during the lookback period