Williams %R: negative scale and range-location extremes
Williams %R measures where a close sits within the recent high/low range on a scale from −100 to 0.
Before this lesson
These lessons provide background; you can still read this page now.
What the indicator measures
Williams %R measures where a close sits within the recent high/low range on a scale from −100 to 0. The negative sign is a scale convention, not a declaration that the asset has lost that percentage. Values near zero mean the close is near the range high.
Calculation and units
%R = −100×(highest high − close)/(highest high − lowest low). All three prices must refer to the same lookback and market. A zero-width range leaves the ratio undefined; TradingHub substitutes −50. This is an implementation convention rather than evidence of an actual midpoint trade.
Worked educational example
For high 110, low 90 and close 105, %R is −100×5/20 = −25. The close is three quarters of the way up that range, so raw Stochastic would be 75. These two raw readings describe the same location on shifted scales, not independent sources of market evidence.
Reading it without overclaiming
The default −20 and −80 references highlight regions near the range edges. A trending market can remain there for extended periods. Crossing a reference is not an execution signal by itself. Range changes can move %R even if the close hardly moves because an older extreme leaves the window.
How TradingHub implements it
The built-in period defaults to 14, with configurable upper and lower levels. The indicator appears once the range window is complete, using close, high and low from the supplied visible bars. Moving its pane to an overlay changes placement only. Live highs and lows can still expand before candle completion.
Comparisons that matter
Compare %R with raw Stochastic using %R = raw %K − 100. The displayed default slow Stochastic additionally smooths %K and %D, so it need not satisfy that identity at every point. RSI uses a different underlying gain/loss definition.
A reproducible chart review
Open the existing Trading chart and choose the same market, interval and closed observation time as your comparison. Record every calculation parameter before changing one at a time. Match source fields, history length and the bar window. Native indicators calculate from the supplied visible slice; Indicator Studio calculates from its available chart snapshot. A difference after panning may therefore be a window or warmup effect rather than a new market event.
Limits and next lesson
The illustration uses constructed candles, not a dated market observation or a backtest. A live candle can change until it closes. Missing history, volume units and implementation conventions limit comparisons. No indicator guarantees a direction, an execution price or protection from loss. Use the related lessons to separate definitions, observed values and possible explanations; a correct quiz records learning progress, not trading competence.
Knowledge check
Does Williams %R = −25 mean the asset lost 25%?
- Yes; it is the asset return
- Yes; it is the account drawdown
- No; it describes close location within a recent range
Show explanation
The oscillator scale is a transformation of range position, not a return or account metric.
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Primary sources and scope
Educational scenarios are not execution guarantees, forecasts or personal recommendations. Check current product rules at their source.
Content revised: . Editorial responsibility: TradingHub. No independent professional certification is claimed.