Williams %R
Williams %R is a momentum oscillator developed by Larry Williams that measures the current closing price relative to the highest high over a look-back period, producing values between −100 and 0 to identify overbought and oversold conditions.
Larry Williams introduced the %R indicator in his 1973 book How I Made One Million Dollars… Trading Commodities Last Year. The indicator was essentially an inverted version of the Stochastic %K, measuring where the close sat within the recent high-low range but expressing the result on a negative scale from 0 (close at the period's high) to −100 (close at the period's low). Readings above −20 were considered overbought; readings below −80 were considered oversold.
The formula was: %R = (Highest High over N periods − Current Close) ÷ (Highest High over N periods − Lowest Low over N periods) × −100. A 14-period look-back was standard, though shorter settings (10 periods) were popular among faster intraday traders and longer settings (21 periods) among positional traders seeking to reduce noise.
In Indian markets, Williams %R found significant application in futures and options trading on NSE. Intraday traders on Nifty and Bank Nifty futures used it on five-minute and fifteen-minute charts to identify potential exhaustion points within trending moves. A 10-period %R reaching −90 or below while price tested a known intraday support level provided a confluence of signals that many traders used to assess entry timing. The indicator responded quickly to price changes due to its sensitivity to the current closing price relative to the recent range's high.
One aspect that distinguished Williams %R from the Stochastic was its raw, unsmoothed nature. Without a built-in signal line, %R moved more sharply and required traders to either apply their own smoothing (such as a 3-period moving average of the %R values) or to use price action confirmation rather than mechanical crossover rules. This characteristic made it better suited to experienced practitioners comfortable with discretionary interpretation.
Divergences between Williams %R and price carried similar analytical significance as those seen in the RSI or Stochastic. When Nifty 50 made a new intraday high but %R failed to register a correspondingly elevated reading, experienced traders noted the weakening breadth of the rally. On the weekly timeframe, such divergences were studied by analysts covering broader market conditions, particularly during the later stages of multi-month rallies when internal breadth metrics often deteriorated before the headline index turned.