Williams %R on a Live Gold Chart

What it shows

Its pane is upside down compared with most oscillators: 0 at the top, −100 at the bottom, with guides at −20, −50 and −80.

How Pravex works it out

Find the highest high and the lowest low over the last Length candles, 14 by default, the current one included.
%R = 100 × (source − highest high) ÷ (highest high − lowest low). The source is the close unless you pick another price.
If the highest high and the lowest low are the same, there is no reading for that candle.

Settings

Setting	Default	What changing it does
Length	14	The lookback for the highest high and lowest low. A 7 (an example) halves the window and sends the line from end to end in a couple of candles.
Source	close	Which price is placed inside the range. The window always uses the highs and lows of the candles, whatever the source is.

How traders read it

A reading near 0 says the close is sitting at the top of the recent range; near −100, at the bottom. Above −20 the close is in the top fifth of the window; below −80, in the bottom fifth. It is a description of where the close sits, not a trade signal.

Some people watch the move back through −50 as a change of lean: a close that climbs from the lower half into the upper half says the recent range is being taken from the bottom.

The line is the same shape as the Stochastic with %K averaging at 1, just flipped onto a negative scale. Anyone used to one can read the other.

When it misleads

In a strong trend the close keeps landing near one end of its range, so %R can stay above −20 or below −80 for a long time while price goes on. With no smoothing the line is jumpy on short gold timeframes and touches the edges many times a day. A single huge candle also stretches the window and pulls every later reading toward the middle until it drops out.

Questions and answers

Why does Williams %R go from 0 to −100?

The formula measures the source against the highest high, so the top of the range is 0 and the distance below it is negative. The bottom of the range reads −100.

Where is the close at −20 on Williams %R?

The source sits 20% of the range below the highest high of the window, so it is near the top. It describes where the close is. It does not say price must turn.

Is Williams %R the same as the Stochastic?

Nearly. With the same window, %R equals the raw Stochastic minus 100. The Stochastic in Pravex adds a %D average and optional %K averaging, while %R stays a single unsmoothed line.

Why did %R jump to 0 on one candle?

That candle closed at the highest high of the last 14, or made a new high and closed near it. With no smoothing, one strong close is enough to take the line from the middle to the top.