RSI vs Williams %R: The Key Differences Explained

Michael Whitman · Trading since 2017, full-time since 2020 · Published 2026-09-08 · Updated 2026-10-04 · Reviewed 2026-10-04

Both are bounded oscillators that traders read for “overbought” and “oversold”. They are built on different questions, though, and on fifty-six years of S&P 500 data the difference shows up as how often each one reaches its extremes: Williams %R lived near its top on about a third of all days, while the relative strength index visited its own top zone on fewer than one day in ten.

What each one is

The relative strength index compares average gains with average losses over 14 sessions, each average smoothed by Wilder’s method, and maps the ratio onto 0 to 100. J. Welles Wilder set it out in his 1978 book, with 70 and 30 as the usual lines. The relative strength index covers the calculation.

Williams %R measures where the close sits in the recent range, counting down from the 14-session high: (highest high - close) / (highest high - lowest low) x -100. A close at the high reads 0; a close at the low reads -100. StockCharts gives 0 to -20 as overbought and -80 to -100 as oversold. Williams percent R covers it in full.

That second formula is the fast stochastic inverted. The stochastic oscillator measures the close up from the low; %R measures it down from the high and multiplies by -100, so %R = %K - 100 exactly.

Where they differ

What drives the reading. The RSI responds to the size of up closes against down closes, so a string of small gains moves it slowly. %R responds only to where today’s close sits between two prices, so one strong close near a fresh high sends it to the top of its scale.

How much smoothing there is. The RSI carries Wilder’s averages, which remember well past 14 sessions. %R has none: today’s value depends on today’s close and the 14-session high and low, nothing else. On the S&P 500, %R’s median daily move was 9.34 points against 2.73 for the RSI, both on 100-point scales.

How often each reaches an extreme. The RSI’s 70 and 30 are rare by construction. %R’s -20 and -80 mark the top and bottom fifth of a two-week range, and a rising market spends a lot of time in the top fifth of its recent range.

Which way the scale runs. The RSI and most oscillators count up from weakness. %R counts down from strength, so its “high” readings are its numerically smallest.

One day on both scales

The S&P 500 closed at 7,722.72 on 2 Oct 2026. The 14-session high was 7,782.19 and the low 7,507.77, a range of 274.42 points.

Williams %R: (7,782.19 - 7,722.72) / 274.42 x -100 = -21.67, just outside the -20 overbought line. The fast stochastic on the same numbers is 78.33, and 78.33 - 100 = -21.67.

The RSI on the same day was 54.83, close to its midpoint. The close sat near the top of its two-week range, which is what %R reports; the recent gains and losses were roughly balanced, which is what the RSI reports. Neither reading is wrong. They answer different questions.

Which one to use: RSI or Williams %R?

Use the relative strength index when you want an extreme to mean something unusual. It reached 70 or above on 8.62% of S&P 500 days and 30 or below on 2.77%, so a reading there is rare by any standard.

Use Williams %R when you want to know where the close sits in its recent range, such as whether a pullback has reached the bottom fifth of the last two weeks. Read that way, its frequent extremes are a description rather than a warning.

Use one or the other, not %R beside the stochastic. Those two are the same line with the scale flipped, as the identity check above shows on every day measured.

And when you switch between them, rewrite the thresholds. A rule written for a scale that counts up from weakness points at the opposite extreme on a scale that counts down from strength.

Why %R lives at its top

A rising index keeps closing near its recent high. Over 1970-2026 the S&P 500 closed in the top fifth of its 14-session range on 5,005 days, more than twice as often as in the bottom fifth (2,174 days), and in the top tenth on 2,961 days.

The RSI does not follow it there. On %R’s top-tenth days the median RSI was 65.59 and the RSI was still below 70 on 2,167 of them (73.18%). A close at the top of a short range does not need large average gains, so the two oscillators part company exactly where a threshold rule would act.

The original data

Sample: S&P 500 daily highs, lows and closes, measured 31 Mar 1970 to 2 Oct 2026, 14,250 sessions (Yahoo Finance, ^GSPC). Yahoo’s index highs and lows before 1962 are copies of the close and are patchy until the mid-1960s, so the series starts in January 1970, and the first 60 sessions only settle Wilder’s averages.

An entry is a day in the zone after a day outside it: 324 for the RSI at 70 or above, 149 at 30 or below, 1,152 for %R at -20 or above and 869 at -80 or below, over the 56.5 years measured.

How the zones overlap. On 1,140 days both readings were overbought: 92.76% of the RSI’s overbought days, but only 22.78% of %R’s. On the oversold side, 370 days had both: 93.67% of the RSI’s 395 and 17.02% of %R’s 2,174. On %R’s overbought days the median RSI was 64.36; on its oversold days, 37.14.

How closely they move. The correlation of the two daily readings was 0.85, and of their day-to-day changes 0.89, across 14,249 pairs. The RSI crossed 50 on 27.11 days a year; %R crossed -50 on 32.30.

What these counts are not. They describe how often each oscillator reaches its lines on one index. They say nothing about what the market did next; no signal was tested here. Every day’s RSI, %R and %K are in the S&P 500 RSI and %R file.

When it fails

The costly failure is fading every %R overbought reading as if it were an RSI 70. A trader moves an “overbought means sell” rule from the RSI to %R. On the S&P 500 that rule now fires on about a third of all days and enters the zone more than twenty times a year instead of fewer than six, mostly during advances, because a rising index keeps closing near its two-week high. The rule ends up selling into the very stretches it was written to avoid.

A second failure is reading %R’s zero as weakness. Zero is a close at the top of the range.

A third is running %R beside the stochastic. It is one line drawn twice.

A fourth is treating a long stay in the zone as exhaustion. %R’s longest stay at -20 or above was 27 sessions.

And a fifth is expecting a longer setting to smooth %R. A longer range changes which high and low it uses, but the reading is still unsmoothed.

Related

The relative strength index covers Wilder’s averages of gains and losses. Williams percent R covers the inverted range reading measured here. And stochastic covers the calculation %R turns upside down.

This page is educational, not financial advice. Test every idea on your own charts before risking money.