Williams %R

Parameters: period = 14 (2–200)

Overview

Williams %R is a momentum indicator that shows where the current closing price sits relative to the high-low range over a specified period. Developed by Larry Williams, this oscillator is the inverse of the Fast Stochastic Oscillator, producing identical signals but with different scaling. The indicator ranges from 0 to -100, with readings near 0 indicating that the price is trading near the period's high, while readings near -100 suggest the price is near the period's low.

The calculation involves finding the difference between the highest high and the current close, then dividing by the total range (highest high minus lowest low) over the lookback period. The result is multiplied by -100 to create the distinctive negative scale. This unique scaling makes Williams %R particularly intuitive, as more negative values indicate increasing oversold conditions.

Interpretation & Trading Signals

Overbought/Oversold Levels:

  • 0 to -20: Overbought zone - potential bearish reversal
  • -80 to -100: Oversold zone - potential bullish reversal
  • -50 Line: Centerline acts as momentum confirmation

Trading Signals:

  • Buy Signal: %R rises above -80 from oversold territory
  • Sell Signal: %R falls below -20 from overbought territory
  • Momentum Shift: Crossing -50 indicates directional momentum change

Advanced Patterns:

  • Failure Swings: Failure to reach overbought/oversold levels signals weakening momentum
  • Divergences: Price making new highs/lows without %R confirmation warns of reversals
  • Multiple Peaks: Double tops in overbought zone or double bottoms in oversold zone

Example Usage

Code examples will be available once the Rust implementation is complete.

Performance Analysis

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