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Williams %R Reversion
Trade reversals when the close gets pinned near the top or bottom of its recent range.
Strategy briefing
Understand what this strategy is actually betting on before you touch the parameter panel.
Use category and difficulty as context
Compare before optimizing
Map the strategy to a regime thesis
Read the math as a constraint system
Use parameters to test fragility, not creativity
Learning linkup
Open Learning Hub
Read the model brief like a skeptic
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Strategy families & selection
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Validation & skepticism
Pro Access
Williams %R Reversion is part of the expanded Pro strategy library. The guide stays public, but running it in backtest, compare, paper tracking, and source-code view is a Pro capability. Pro currently unlocks 8 additional pre-built strategies.
The Intuition
Williams %R is closely related to the stochastic oscillator, but it is expressed on a negative scale from 0 to -100. Readings near 0 mean the close sits near the recent high. Readings near -100 mean the close sits near the recent low.
For reversal traders, this is a compact way to detect stretched short-term positioning. A very low reading suggests the asset has sold off hard relative to its recent range. A very high reading suggests the asset has rallied aggressively into the top of that range.
The indicator became popular because it is easy to read and quick to compute. In practice it is less about predicting a major turn than about identifying points where short-term moves may be vulnerable to a snapback.
Like every oscillator, it breaks down in persistent trends. The indicator can stay pinned at an extreme while price continues marching in the same direction. That is why many systematic traders only trust Williams %R when the broader regime looks range-bound or when a separate trend filter is neutral.
The Math
Read this as a compact model summary: what the signal sees, what it ignores, and where fragility can creep in.
HighestHigh(t) = max(High[t-n : t])
LowestLow(t) = min(Low[t-n : t])
%R(t) = -100 × (HighestHigh(t) - Close(t)) / (HighestHigh(t) - LowestLow(t))
Signal(t) = +1 if %R(t) < oversold threshold [for example, -80]
= -1 if %R(t) > overbought threshold [for example, -20]
= 0 otherwise
Parameters
| Parameter | Type | Default | Description |
|---|---|---|---|
| window | int | 14 | Range lookback window |
| oversold | float | -80.0 | Williams %R threshold for long entries |
| overbought | float | -20.0 | Williams %R threshold for short entries |
Source Code
Source access for this built-in strategy is included with Pro.
Further Reading
- Williams, L. (1973). How I Made One Million Dollars Last Year Trading Commodities.
- Murphy, J. (1999). Technical Analysis of the Financial Markets. NYIF.
- Pring, M. (2002). Technical Analysis Explained. McGraw-Hill.
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