> For the complete documentation index, see [llms.txt](https://docs.skyrexio.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.skyrexio.com/strategy-builder/built-in-conditions/momentum-oscillators/williams-r-14.md).

# 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 %}