Williams %R vs Stochastic vs RSI: %R Matched the Fast Stochastic on All 16,913 Bars, and Only RSI Paid as a Momentum Signal

Williams %R, Stochastic and RSI sit next to each other in the MetaTrader oscillator menu, and most comparisons treat them as three different opinions about the market. I wanted to know how different they really are, so I traded all of them with the same entries, exits and costs on the same EURUSD 5-minute data I used in my Williams %R test.

Is Williams %R the same as Stochastic?

Yes. The fast Stochastic %K is 100 × (close − lowest low) ÷ (highest high − lowest low). Williams %R is -100 × (highest high − close) ÷ (highest high − lowest low). Add 100 to %R and you get %K. Same inputs, same period, flipped scale.

I checked it on every bar rather than trusting the algebra. On 16,913 EURUSD M5 bars, the largest difference between %R 14 and fast %K 14 minus 100 was 0.0000000000008 — a rounding error. The trades were nearly identical too:

The one-signal difference comes from a bar landing exactly on the level, where “above” and “at” are decided by the last decimal. If you already have Stochastic 14 with slowing 1 on your chart, adding %R 14 adds nothing. My Stochastic settings test found 14, 1, 3 — the unsmoothed version — ahead of the MT4 default 14, 3, 3, which fits: that is %R under another name.

How were the four oscillators compared?

• Williams %R 14, levels -20 and -80.
• Fast Stochastic %K 14 (slowing 1), levels 80 and 20.
• Slow Stochastic %K 14/3/3, the MT4 default, levels 80 and 20.
• RSI 14, levels 70 and 30.

Three entry rules for each: fade on touch of the zone, fade when the line leaves the zone, and momentum — follow the line into the zone. Two exits: after one hour, or when the line reaches the opposite zone. 1 pip of cost per trade; results split at July 15.

Which oscillator did best as an overbought/oversold fade?

Net pips per trade after a 1-pip cost, EURUSD M5.

The three range-based lines — %R and both Stochastics — ended within 0.08 pips of each other. All three had an edge before costs of about 0.7 to 0.8 pips, and all three lost after it. Smoothing to 14/3/3 halved the number of signals and changed almost nothing else.

RSI was different. It spent only 22.6% of the time beyond 70 or 30, half as often as the others, and when it got there, fading it was a disaster: -2.37 pips per trade. When RSI reaches 70 on a 5-minute chart, the move behind it is usually strong enough to keep going. I looked at RSI overbought trades from another angle in RSI divergence vs overbought, and the period question is covered in RSI settings for forex.

Which one worked as a momentum signal?

Turn the rule around — buy when the line enters the top zone, sell when it enters the bottom one — and the ranking flips:

RSI above 70 as a buy, held until RSI reached 30, made +0.37 pips per trade after costs over 266 trades, and was positive in both halves. It won only a third of the time; the winners were long trend rides. %R and Stochastic, with the same rule, lost more than 1.7 pips per trade.

The reason is what each line measures. %R and Stochastic only ask where the close sits in the recent range — a single bar closing at the top pins them at 0 or 100, and on M5 that happens on about a quarter of all bars. RSI averages the size of up and down moves over 14 bars, so it only reaches 70 after sustained buying. %R’s “overbought” is common and means little; RSI’s is rarer and means momentum.

266 trades in under three months is a small sample, and +0.37 pips is thin. But it is the opposite of how RSI is usually taught, so it is worth knowing.

Does RSI confirm Williams %R signals?

No. I took the %R fades that trigger when the line leaves the zone and split them by whether RSI gave the same-direction signal within three bars:

They agreed on 39.3% of %R signals, and the agreed ones were slightly worse. Two oscillators that read the same bars do not make each other more reliable — the same thing I saw pairing Stochastic with RSI.

Which one should you keep on your chart?

• Keep only one of %R and Stochastic. They are the same line. If you like the -100 to 0 scale, keep %R; if you want a signal line, keep Stochastic.
• For fading, the range lines had the edge — about 0.75 pips before costs. That needs a spread well under 1 pip, or a higher timeframe. My Williams %R MT4 settings guide shows the default 14 paying on H1.
• Do not fade RSI 70/30 on M5. It lost 2.37 pips per trade.
• If you use RSI, test it as a momentum filter — its 70/30 lines behaved like a breakout signal here.

Frequently asked questions

What is the difference between Williams %R and Stochastic?

Only the scale. Williams %R equals the fast Stochastic %K minus 100, so -20 on %R is 80 on Stochastic. On 16,913 EURUSD bars they never differed beyond rounding. The MT4 Stochastic adds smoothing (the 3, 3), which halves the signals but did not change results.

Is Williams %R better than RSI?

For fading overbought and oversold, yes: on EURUSD M5, %R 14 lost 0.27 pips per trade after costs against 2.37 for RSI 14. For following momentum, RSI was better: +0.37 pips per trade against -1.73 for %R.

Can I use Williams %R and RSI together?

It did not help here. %R signals confirmed by RSI within three bars lost 1.18 pips per trade; unconfirmed ones lost 1.06.

Which is faster, Williams %R or Stochastic?

Williams %R and the fast Stochastic with slowing 1 are equally fast because they are the same line. The default MT4 Stochastic 14/3/3 is slower: 1,413 zone signals against 2,476 on the same bars.