Studies · Trend
Random Walk Index (RWI)
randomWalkIndex · Poulos' RWI — the move in units of a random walk's reach
Drawn in its own panelReads high, low, close
Hover the chart to read values · practice data: a seeded random walk with no overnight gaps
What it measures
Asks whether the recent move was bigger than a random walk would produce. For every horizon up to the period it compares the move with the distance a coin-flip market would be expected to cover, and keeps the largest ratio. One line measures the up move, the other the down move.
How traders use it
- A reading above 1 says the move is larger than chance would explain, which is read as a real trend.
- Trend direction: RWI High above 1 with RWI Low below 1 is an uptrend, and the reverse a downtrend.
- Both lines below 1 means the market is wandering without a trend.
Parameters
| Name | Value | Default | Allowed | What it does |
|---|---|---|---|---|
| period | 14 | ≥ 2 usual 5–40 | The longest horizon tested, in bars. |
Outputs
| High | RWI High: the strength of the up move. |
| Low | RWI Low: the strength of the down move. |
Drawn in one colour, one line per output, told apart by line texture. Hover the chart to read each one.
Good to know
Either line can dip below zero when the market moved the other way across every horizon. That just means "no move in this direction".