Williams %R vs Money Flow Index
Williams percent r measures where the close sits inside the recent high-low range, using price alone. The money flow index runs a similar momentum calculation on the typical price and weights it by volume, so it reports participation as well as direction.
These two are unusually well matched: near-identical teaching volume, near-identical audiences, both bounded, both built from the whole bar rather than the close alone. The single difference is whether volume is in the calculation, and that turns entirely on where you are trading.
What each one is
Williams percent r measures where the close sits inside the recent high-low range, from minus one hundred at the bottom to zero at the top, with no smoothing. Williams %R covers it.
The money flow index runs a momentum calculation on the typical price — high, low and close averaged — weighted by the volume traded on each bar. The money flow index covers the calculation, and RSI covers the momentum measure it resembles.
Both read the whole bar, which is rarer than it sounds. Most oscillators are built from closes only. Whereas those tools cannot tell a quiet bar from a violent one that closed in the same place, both of these can.
Where they differ
Whether participation counts. A move on heavy volume and the same move on almost none look identical to williams percent r. The money flow index separates them, and that is the only thing it can say that the other cannot.
Whether the reading is smoothed. Williams percent r shows every bar’s position raw. The money flow index averages over its lookback, so it is steadier and later — the usual trade of fewer false moves for each one arriving after the fact.
How much can go wrong with the input. Price is price everywhere. Volume depends on which venue you are looking at, whether the feed aggregates, and whether a contract has rolled — so the money flow index inherits every problem in that feed while williams percent r has nothing to inherit.
How each behaves at the extreme. Williams percent r reaches its extreme constantly because nothing smooths it. The money flow index gets there less often, so a reading there carries more weight.
Where they agree
Both are bounded and both pin. In a sustained move each reaches its extreme and stops distinguishing strong from stronger.
Both are misread as reversal signals. An extreme means the recent move was powerful, and power is what a trend is made of.
Both fight the same drift. On this site’s shared series 54% of 566 ten-bar windows finished higher than they started.
And both cost a round trip when acted on — 0.0098 here, about 2% of the median bar range of 0.493.
Which one to use
Run the money flow index on listed stocks and futures. Both have a consolidated tape, so the volume figure is a real count and the weighting means what it claims to mean.
Run williams percent r on spot foreign exchange. There is no central tape, so the volume your platform draws is one broker’s flow rather than the market’s — and a tool built on that will look perfectly plausible while measuring a sample you did not choose.
Run both when you want a second opinion that is actually second. They do not share all their inputs, which is unusual among oscillators and makes disagreement between them informative rather than a rounding difference.
And when the two disagree on a listed instrument, the volume reading is the one to weight. A price extreme with no volume behind it is precisely the case the second input exists to flag.
Why reading the whole bar matters
Because a close is one number chosen from a range. On a bar whose range is 2.338 — the largest on this series — the close could sit anywhere, and a close-only oscillator treats each of those outcomes as a completely different reading while the bar itself was the same event.
And because thin conditions are where closes mislead most. A wide bar on no participation can finish anywhere, and only one of these two tools has any way of knowing that is what happened.
The original data
Of the 24,971 unique videos in the search corpus, no title compares these two directly. Williams percent r appears in 46 titles at a median of 3,253 views across 45 channels. The money flow index appears in 44, at a median of 3,160 across 36.
Almost identical on every measure — video count, median audience, channel spread. These are two mature tools with settled, modest audiences and no novelty attached to either, which is a rare thing to find in a corpus dominated by whatever is currently fashionable.
On the chart above, the disagreement is the whole point. A price extreme without a volume extreme says the move happened on thin participation, which is the reading a price-only tool cannot produce.
When it fails
The characteristic failure is running the money flow index on an instrument with no genuine volume. Spot foreign exchange is the clear case, and contracts near a roll are another: the number your platform shows is real data about the wrong thing. The tool has no way to signal that its second input is unreliable, so it produces confident-looking readings that encode one venue’s flow rather than the market’s, and you will never see an error. On those instruments williams percent r is the honest choice, whereas on a listed stock the reverse holds and the volume weighting is the reason to prefer it.
A second failure is using either as a standalone sell in a trend. Both pin, and pinned describes strength rather than exhaustion.
A third is reading a divergence as a forecast. It describes two lines, and most resolve by the indicator catching up.
A fourth is tuning the lookback until the last swing is caught, which fits that sample only.
And a fifth is stacking williams percent r with a stochastic, which is one measurement twice.
Related
Williams %R covers the raw range-position reading. The money flow index covers the volume weighting. And RSI covers the momentum measure the money flow index resembles.
The reason to prefer either of these over a close-only oscillator is that both read the whole bar. A close is one number picked from a range, and on a wide bar it is close to arbitrary — which is why so many oscillators disagree with what the chart plainly shows.
— Michael Whitman
This page is educational, not financial advice. Test every idea on your own charts before risking money.