# Williams %R (14)

### Introduction

The Williams %R (14) is a **neutral momentum oscillator** with an inverted scale that measures overbought and oversold conditions. This indicator is essential for **precision timing** in both trending and ranging markets, oscillating between 0 and -100 with unique inverted thresholds for market extremes.

### How Williams %R (14) Works

Williams %R was developed by Larry Williams as a momentum oscillator that measures where the current close is relative to the high-low range over a specified period. The calculation is: **%R = (Highest High - Close) / (Highest High - Lowest Low) × -100**.

Williams %R characteristics: • **Values above -20** indicate overbought conditions (potential selling opportunities)\
• **Values below -80** indicate oversold conditions (potential buying opportunities)\
• **Inverted scale** (-100 to 0) makes it unique among oscillators\
• **Fast and sensitive** - reacts quickly to price extremes

{% hint style="info" %}
**Market Psychology:** Williams %R measures how "high" or "low" the current price is within the recent range. When %R is above -20, it means the close is very near the recent high, suggesting buying pressure may be exhausted. When below -80, the close is near the recent low, indicating selling pressure may be exhausted and a bounce is possible.
{% endhint %}

#### Key Characteristics

| Attribute        | Details                                                |
| ---------------- | ------------------------------------------------------ |
| **Category**     | Momentum Oscillators                                   |
| **Type**         | Neutral Momentum Oscillator (Inverted Scale)           |
| **Primary Use**  | Overbought/oversold identification and reversal timing |
| **Timeframe**    | All timeframes supported (1m to 1M)                    |
| **Confirmation** | Volume analysis, price action, support/resistance      |

### Strategy Applications

#### 🟢 LONG STRATEGY (Primary Use)

{% hint style="success" %}
Use Williams %R for LONG strategies when **%R < -80** indicates oversold conditions, especially effective in ranging markets and pullbacks.
{% endhint %}

**Base Entry Order (LONG)**

```
Trigger Type: Once per bar close
Bar TF: 1H

First Condition: Williams %R (14)
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: -80

AND

First Condition: Volume
Timeframe: 1H
Operator: Greater Than
Second Condition: Simple Moving Average (20)
Timeframe: 1H
```

**Additional Entry Orders (LONG)**

```
Additional Entry 1: Extreme oversold conditions
First Condition: Williams %R (14)
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: -90

AND

First Condition: Close Price
Timeframe: 1H
Operator: Greater Than
Second Condition: Low Price
Timeframe: 1H

OR

Additional Entry 2: Williams %R bullish momentum
First Condition: Williams %R (14)
Timeframe: 1H
Operator: Cross Above
Second Condition: Value
Value: -70

AND

First Condition: Williams %R (14)
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: -65
```

**Take Profit Orders (LONG)**

```
Rule 1: Exit condition - Overbought conditions reached
First Condition: Williams %R (14)
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: -20

OR

Rule 2: Exit condition - Momentum turning bearish
First Condition: Williams %R (14)
Timeframe: 1H
Operator: Cross Below
Second Condition: Value
Value: -50

OR

Rule 3: Exit condition - Extreme overbought warning
First Condition: Williams %R (14)
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: -10
```

**Stop Loss Orders (LONG)**

```
Rule 1: Stop loss - Deeper oversold breakdown
First Condition: Williams %R (14)
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: -95

OR

Rule 2: Stop loss - Support level breakdown
First Condition: Close Price
Timeframe: 1H
Operator: Less Than
Second Condition: Low Price
Timeframe: 1H

OR

Rule 3: Stop loss - Volume confirms weakness
First Condition: Volume
Timeframe: 1H
Operator: Greater Than
Second Condition: Simple Moving Average (50)
Timeframe: 1H
```

#### 🔴 SHORT STRATEGY (Primary Use)

{% hint style="success" %}
Use Williams %R for SHORT strategies when **%R > -20** indicates overbought conditions, especially effective in ranging markets and rally fades.
{% endhint %}

**Base Entry Order (SHORT)**

```
Trigger Type: Once per bar close
Bar TF: 1H

First Condition: Williams %R (14)
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: -20

AND

First Condition: Volume
Timeframe: 1H
Operator: Greater Than
Second Condition: Simple Moving Average (20)
Timeframe: 1H
```

**Additional Entry Orders (SHORT)**

```
Additional Entry 1: Extreme overbought conditions
First Condition: Williams %R (14)
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: -10

AND

First Condition: Close Price
Timeframe: 1H
Operator: Less Than
Second Condition: High Price
Timeframe: 1H

OR

Additional Entry 2: Williams %R bearish momentum
First Condition: Williams %R (14)
Timeframe: 1H
Operator: Cross Below
Second Condition: Value
Value: -30

AND

First Condition: Williams %R (14)
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: -35
```

**Take Profit Orders (SHORT)**

```
Rule 1: Exit condition - Oversold conditions reached
First Condition: Williams %R (14)
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: -80

OR

Rule 2: Exit condition - Momentum turning bullish
First Condition: Williams %R (14)
Timeframe: 1H
Operator: Cross Above
Second Condition: Value
Value: -50

OR

Rule 3: Exit condition - Extreme oversold bounce risk
First Condition: Williams %R (14)
Timeframe: 1H
Operator: Less Than
Second Condition: Value
Value: -90
```

**Stop Loss Orders (SHORT)**

```
Rule 1: Stop loss - Deeper overbought extension
First Condition: Williams %R (14)
Timeframe: 1H
Operator: Greater Than
Second Condition: Value
Value: -5

OR

Rule 2: Stop loss - Resistance level breakout
First Condition: Close Price
Timeframe: 1H
Operator: Greater Than
Second Condition: High Price
Timeframe: 1H

OR

Rule 3: Stop loss - Volume surge confirms strength
First Condition: Volume
Timeframe: 1H
Operator: Greater Than
Second Condition: Simple Moving Average (50)
Timeframe: 1H
```

### Advanced Strategy Combinations

#### Multi-Timeframe Williams %R

{% tabs %}
{% tab title="Setup" %}
**Timeframe Alignment:**

* **Daily:** Williams %R direction for major bias
* **4H:** Williams %R extremes for intermediate signals
* **1H:** Williams %R execution with volume confirmation
  {% endtab %}

{% tab title="Execution" %}
**Entry:** 1H Williams %R extreme + higher timeframe alignment\
**Target:** Williams %R opposite extreme or midline\
**Stop:** Williams %R failure pattern or support/resistance break
{% endtab %}
{% endtabs %}

#### Williams %R Divergence Strategy

{% hint style="info" %}
**Williams %R Divergence Framework:**

**Bullish Divergence (LONG Setup):**

1. Price makes lower lows
2. Williams %R makes higher lows (less oversold)
3. Enter when %R crosses above -70
4. Target %R reaching -20 levels

**Bearish Divergence (SHORT Setup):**

1. Price makes higher highs
2. Williams %R makes lower highs (less overbought)
3. Enter when %R crosses below -30
4. Target %R reaching -80 levels

**Range Trading Strategy:**

* **Buy Zone:** %R < -80 near support levels
* **Sell Zone:** %R > -20 near resistance levels
* **Neutral Zone:** %R between -50 and -30 (avoid trading)

**Execution Framework:**

* **Base Order:** Williams %R extreme + support/resistance confluence
* **Additional:** Williams %R momentum confirmation
* **Take Profit:** Williams %R opposite extreme
* **Stop Loss:** Williams %R failure or level break
  {% endhint %}

### Risk Management Guidelines

#### Position Sizing Based on Williams %R Levels

| Williams %R Level | Position Size          | Strategy Type        | Risk Level |
| ----------------- | ---------------------- | -------------------- | ---------- |
| **%R > -10**      | Reduced (extreme risk) | Contrarian SHORT     | High       |
| **%R -10 to -20** | Standard size          | Mean reversion SHORT | Medium     |
| **%R -20 to -80** | Minimal                | Trend following only | Medium     |
| **%R -80 to -90** | Standard size          | Mean reversion LONG  | Medium     |
| **%R < -90**      | Reduced (extreme risk) | Contrarian LONG      | High       |

#### Williams %R Reliability Factors

{% tabs %}
{% tab title="High Reliability" %}
✅ Extremes with volume confirmation\
✅ Support/resistance level confluence\
✅ Multi-timeframe alignment\
✅ Divergence with price action
{% endtab %}

{% tab title="Low Reliability" %}
❌ Extremes in strong trends\
❌ Single timeframe signals\
❌ No volume confirmation\
❌ Conflicting market structure
{% endtab %}
{% endtabs %}

### Best Practices

#### For Mean Reversion Strategies

{% hint style="success" %}

1. **Wait for extremes** - %R < -80 for LONG, %R > -20 for SHORT
2. **Volume confirmation** - Ensure volume supports the reversal
3. **Support/resistance** - Best results at key price levels
4. **Quick profits** - Take profits at %R midline (-50) or opposite extreme
   {% endhint %}

#### For Trend Following Strategies

{% hint style="warning" %}

1. **Trend context** - Use %R pullbacks in trending markets
2. **Avoid fighting trends** - Don't short strong uptrends at %R > -20
3. **Pullback entries** - Use %R < -80 in uptrends, %R > -20 in downtrends
4. **Volume validation** - Confirm trend continuation with volume
   {% endhint %}

#### Common Mistakes to Avoid

{% hint style="danger" %}

* **Inverted scale confusion** - Remember %R uses negative values
* **Fighting strong trends** - Don't counter-trend at extremes in strong moves
* **Ignoring volume** - Williams %R without volume confirmation is weak
* **No support/resistance** - Best signals occur at key price levels
  {% endhint %}

### Market Conditions Analysis

| Market Type         | Williams %R Effectiveness | Recommended Approach                 |
| ------------------- | ------------------------- | ------------------------------------ |
| **Trending Up**     | 🟡 Medium                 | Use %R < -80 for pullback entries    |
| **Trending Down**   | 🟡 Medium                 | Use %R > -20 for rally fades         |
| **Ranging**         | 🟢 High                   | Classic overbought/oversold strategy |
| **High Volatility** | 🟢 High                   | Williams %R extremes more reliable   |
| **Low Volatility**  | 🟡 Medium                 | Use tighter parameters               |

### Related Indicators

| Indicator          | Relationship                    | Link                                                                                                                               |
| ------------------ | ------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------- |
| **Stochastic %K**  | Similar momentum concept        | [Stochastic %K](https://docs.skyrexio.com/strategy-builder/built-in-conditions/momentum-oscillators/stochastic-k-5-3-0-3-0)        |
| **RSI**            | Alternative momentum oscillator | [RSI](https://docs.skyrexio.com/strategy-builder/built-in-conditions/momentum-oscillators/relative-strength-index-14)              |
| **Stochastic RSI** | More sensitive momentum         | [Stochastic RSI %K](https://docs.skyrexio.com/strategy-builder/built-in-conditions/momentum-oscillators/stochastic-rsi-k-14-5-3-0) |
| **CCI**            | Cyclical momentum comparison    | [CCI](https://docs.skyrexio.com/strategy-builder/built-in-conditions/momentum-oscillators/commodity-channel-index-20)              |

### Conclusion

{% hint style="info" %}
Williams %R (14) is a **fast and sensitive momentum oscillator** that excels at identifying precise reversal points. Its inverted scale and quick response to price extremes make it particularly valuable for timing entries and exits in volatile markets.
{% endhint %}

#### Key Takeaways

{% hint style="success" %}

* **PRIMARY USE**: Overbought (>-20) and oversold (<-80) identification
* **SECONDARY USE**: Divergence analysis and reversal timing
* **INVERTED SCALE**: Remember negative values (-100 to 0)
* **ALWAYS**: Combine with volume analysis and support/resistance levels
  {% endhint %}

Success with Williams %R requires understanding its inverted scale and fast-moving nature. Use it for precise timing in ranging markets and pullback entries in trends, always confirming with volume and key price levels.

{% hint style="info" %}
**Ready to Build Your Own Strategy?**

Try our free AI-powered Strategy Builder at [app.skyrexio.com](https://app.skyrexio.com) and start creating professional trading strategies today. No coding required!
{% endhint %}


---

# Agent Instructions: Querying This Documentation

If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter:

```
GET https://docs.skyrexio.com/strategy-builder/built-in-conditions/momentum-oscillators/williams-r-14.md?ask=<question>
```

The question should be specific, self-contained, and written in natural language.
The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.