In this lesson
- compute Williams %R and recognise the flipped stochastic in it
- switch it on on Binance and make sense of the negative numbers
- see why two "different" oscillators draw the same line
Larry Williams took the stochastic, turned it upside down and gave it negative numbers. The result is called Williams %R, and on Binance you find it as WR. Professor Wick studies it hanging by his feet – he says it is clearer that way.
How it is computed#
- Find the highest high and the lowest low of the last 14 candles.
- %R = (high − close) / (high − low) × (−100).
When the price closes at the high of the range, %R is 0. At the low it is −100. The levels are therefore written as negatives: above −20 the close is near the top of the range (like the stochastic above 80), below −80 near the bottom (like below 20).
And here is the punchline: %R + 100 = the unsmoothed stochastic %K. It is exactly the same number, shifted by a hundred. On the last day of our data %R was −86.4 and the stochastic 13.6.
Where to find it on Binance#
In Original mode: the indicator icon, the Sub Indicator tab, tick WR, Save. The legend in the panel shows Wm %R(14) – a period of 14 candles.
Twins#
Put %R and the stochastic one under the other and you see the same shape – just labelled differently and smoothed a little differently:
- Stochastic 14, 1, 3 (panel below the chart: %K in blue, %D in yellow, lines at 20 and 80)
- Williams %R 14 (panel below the chart, lines at −20 and −80)
Try the period. It behaves just like the stochastic – a short one jumps, a long one drags:
The line entered the overbought or oversold zone 56×. The common default setting – try moving the slider both ways.
Two oscillators, one piece of information
Williams %R and the stochastic are not two independent confirmations. When both agree on "oversold", you still know only one thing: the price is near the bottom of the recent range. A second opinion only comes from another family.
Common myths#
- "−90 is terribly low, the market is dead." It only means the close is near the low of the last 14 candles.
- "%R is better than the stochastic." It is the same calculation with a different scale.
- "A negative number = the price is falling." The whole scale is negative; −20 is near the top.
Summary
- %R = (high − close) / (high − low) × (−100) over the last N candles.
- 0 is at the high of the range, −100 at the low; the levels are −20 and −80.
- %R + 100 = the unsmoothed stochastic %K.
- On Binance it is WR, with the legend Wm %R(14).