The random walk index (RWI) is a technical indicator that attempts to determine if a stock’s price movement is random or nature or a result of a statistically significant trend. The random walk index attempts to determine when the market is in a strong uptrend or downtrend by measuring price ranges over N and how it differs from what would be expected by a random walk (randomly going up or down).
The greater the range suggests a stronger trend. The RWI states that the shortest distance between two points is a straight line and the further prices stray from a straight line, implies the market is choppy and random in nature.
_SECTION_BEGIN
(
"RWIHI"
);
minperiods =
Param
(
"Min Periods"
, 9, 1, 200, 1 );
maxperiods =
Param
(
"Max Periods"
, 40, 1, 200, 1 );
Plot
(
RWIHi
( minperiods, maxperiods) ,
_DEFAULT_NAME
(),
ParamColor
(
"Color"
, colorCycle ),
ParamStyle
(
"Style"
) );
_SECTION_END
();
_SECTION_BEGIN
(
"RWILO"
);
minperiods =
Param
(
"Min Periods"
, 9, 1, 200, 1 );
maxperiods =
Param
(
"Max Periods"
, 40, 1, 200, 1 );
Plot
(
RWILo
( minperiods, maxperiods) ,
_DEFAULT_NAME
(),
ParamColor
(
"Color"
, colorCycle ),
ParamStyle
(
"Style"
) );
_SECTION_END
();
_SECTION_BEGIN
(
"Line"
);
Line =
Param
(
"Line"
, 1 );
Plot
( Line,
"Line"
,
colorRed
,
styleThick
|
styleDashed
|
styleNoLabel
);
_SECTION_END
();
_SECTION_BEGIN
(
"RWI System"
);
Sell
=
Cross
( Line,
RWIHi
( minperiods, maxperiods));
Buy
=
Cross
(
RWILo
( minperiods, maxperiods), Line);
for
( i = 0; i <
BarCount
; i++ )
{
if
(
Buy
[i] )
PlotText
(
"Bull vs Bear"
, i, 1,
colorLavender
);
if
(
Sell
[i] )
PlotText
(
"Bull vs Bear"
, i, 1,
colorLavender
);
}
_SECTION_END
();
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