What Is Williams %R?
Williams %R is a momentum oscillator that measures the current closing price relative to the highest high over a lookback period (typically 14). It oscillates between 0 and -100, where readings above -20 are overbought and below -80 are oversold. It is mathematically similar to the Stochastic Oscillator but inverted.
How Williams %R Works
The formula: %R = (Highest High - Close) / (Highest High - Lowest Low) × -100. When the close equals the highest high, %R is 0; when it equals the lowest low, %R is -100. The indicator is leading — it often turns before price, providing early reversal signals. Crossovers through the -50 midline indicate shifts in momentum.
Why It Matters for Traders
Williams %R is useful in crypto for timing entries within a trend. In an uptrend, buying when %R drops below -80 (oversold) and then crosses back above it targets mean-reversion pullback entries. In a downtrend, selling when %R rises above -20 (overbought) and then drops back below captures short-term reversals. The key is only trading in the direction of the dominant trend.
