Williams Percent R Strategy

Explore the Williams Percent R strategy for daily S&P 500 trading. This guide details entry and exit rules for identifying overbought/oversold conditions using

Published · Updated · Methodology: Technical Indicators

Part of: Algorithmic & Automated Trading

  • Methodology: Technical Indicators
  • Content type: strategy
  • Timeframes: Daily
  • Markets: S&P 500, Stock Market

Indicators used

  • Williams Percent R

Source video

Decoded from: Backtesting the Williams Percent R trading strategy on the S&P 500 by Quantified Strategies — watch the original

Key timestamps:

  • 0:00 - Introduction to Williams %R strategy
  • 0:32 - What is Williams %R?
  • 0:55 - How to use Williams %R (overbought/oversold levels)
  • 1:15 - Example of a 2-day Williams %R trading strategy
  • 1:25 - Long entry rule
  • 1:35 - Long exit rule
  • 1:50 - Backtest results (annual return, trades, exposure, drawdown)
  • 2:20 - Performance during market crashes

Strategy overview

Williams %R is a momentum oscillator that measures where the current close sits within the recent high-low range, scaled from 0 to -100. What separates this entry from the textbook version is the lookback: the record here is built on a two-day window, which is short enough that the indicator stops behaving like a trend gauge and becomes a measure of very recent stretch. On a Daily chart, a two-day %R is close to asking a single question — did today close near the bottom of what the last two days offered?

The source is Quantified Strategies' "Backtesting the Williams Percent R trading strategy on the S&P 500", and the title says where the emphasis lies. This is not a tutorial about drawing an oscillator on a chart; it is a channel that builds its content around historical testing, applied to one index and one parameterization. The chapter list reflects that shape — roughly a minute of definition and level-setting up front, then a worked example with an entry rule and an exit rule, and that is the whole video. Mean-reversion on a broad equity index is also a case where the instrument choice does part of the work, since the S&P 500's tendency to recover short-term weakness is a property of that market, not of the oscillator.

One caution about the standard levels: the -20 and -80 lines are conventions inherited from longer lookbacks, and on a two-day window an oscillator reaches those extremes constantly, which is why short-lookback versions typically move their thresholds rather than trade the textbook ones. No decoded rule set was extracted for this entry, so what you have here is the concept, the parameter frame, and the source — the operational specifics remain in the video itself.

Topics

williams percent r strategy · trading strategy · pine script · tradingview strategy · momentum indicator · s&p 500 trading strategy · daily trading strategy · technical indicators · stock market strategy · mean reversion strategy · overbought oversold · williams %r strategy

Frequently asked questions

What is the Williams %R indicator?

Williams %R is a momentum oscillator that shows where the current close falls within the high-low range of a chosen lookback period, expressed on a scale from 0 (at the top of the range) to -100 (at the bottom). It is used to gauge whether price is stretched relative to its recent range.

What do overbought and oversold mean for Williams %R?

By convention, readings above -20 are called overbought and readings below -80 oversold. These are descriptive labels for position within the range, not signals on their own — and how meaningful they are depends heavily on the lookback period, since a short lookback hits both extremes far more often than a long one.

Why use a 2-day lookback instead of the standard 14?

A short lookback turns the oscillator into a measure of very recent stretch rather than of the broader trend, which is the usual setup for short-term mean-reversion testing. It also changes what the conventional thresholds mean, so short-lookback versions generally need their levels reconsidered rather than carried over.

Does this video show backtest results for the strategy?

The video is framed around backtesting Williams %R on the S&P 500 and walks through a two-day example with a long entry and a long exit, but no performance figures are recorded in this entry — and no decoded rule set was extracted for it. Treat any results shown as tied to one index, one period and one parameter choice, and test independently before drawing conclusions.

About this strategy page

This trading strategy was decoded by Strategy Decoder's AI from a public YouTube trading video and turned into a structured, reviewable specification. In the interactive app this page shows the full entry and exit logic, risk management settings, the indicators involved with their parameters, AlgoWizard-compatible logic and a Pine Script export ready for TradingView backtesting — plus an automated backtest verdict when one has been computed for this strategy.

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