Williams %R Trading Strategy — Williams Percent Range vs RSI (Backtest, Indicator & Systems)

Quantified Strategies
1 min readOct 12, 2023

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Williams %R does work. In this article, we explain how to use Williams %R in a trading strategy, and finally, we backtest trading strategies to see if Williams %R works. Does it work? Our conclusion is that Williams %R seems to work pretty well.

We backtest the Williams %R trading strategy on the S&P 500 (SPY). Entry is on the close when the Williams %R is below -90 and exit is when today’s close is higher than yesterday’s high or when the Williams %R closes above -30.

By using optimization we get, perhaps as expected, the best results on short lookback periods. We used a minimum lookback period of two days and a maximum of 25 days. All tests gave a profit factor of two or more, except for 25 days which produced 1.9.

The best result is by using a two-day lookback period. This gives this equity curve below.

Williams %R Strategy

You can find more info about this trading strategy here:
https://www.quantifiedstrategies.com/williams-r-trading-strategy/

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