Williams %R is a momentum indicator that measures overbought/oversold levels. Williams? %R was developed by Larry Williams.

The interpretation of Williams' %R is very similar to that of the Stochastic Oscillator except that %R is plotted upside-down and the Stochastic Oscillator has internal smoothing. To display the Williams? %R indicator on an upside-down scale, it is usually plotted using negative values (e.g., -20%). For the purpose of analysis and discussion, simply ignore the negative symbols. Readings in the range of 80 to 100% indicate that the security is oversold while readings in the 0 to 20% range suggest that it is overbought. As with all overbought/oversold indicators, it is best to wait for the security's price to change direction before placing your trades. For example, if an overbought/oversold indicator (such as the Stochastic Oscillator or Williams' %R) is showing an overbought condition, it is wise to wait for the security's price to turn down before selling the security.

This indicator is described in more details in the Steve Achelis' book "Technical Analysis from A to Z".

Formula: