The Random Walk Index Metatrader 5 custom indicator is abbreviated as RWI, and is traditionally used to define when a stock’s price movement becomes random in nature or a statistically significant trend.
This attributes of the Random Walk Index (RWI) can also be applied on the forex market, thereby making it an impressive tool to deploy when trading.
The RWI MT5 forex indicator tries to determine when the market is in a strong uptrend or downtrend by gauging price ranges over N periods and how it be at variance from what would be expected a random walk (erratically moving up or down).
A stronger trend is shown when the range widens.
The Random Walk Index Metatrader 5 forex indicator states that the shortest distance between two points is a straight line and market is choppy and in nature when prices stray away from a straight line.
The Random Walk Index MT5 forex indicator is computed using the maximum of the following values for high period using the formula below:
(HI – LO.n) / (ATR.1(n) * SQRT(n))
The USD/JPYM30 chart below displays the WPR candles Metatrader 5 forex indicator in action
Basic Trading Signals
Buy Signal: Go long when the lime green line of the RWI MT5 forex indicator break above the pale violet red line.
Sell Signal: Go short when the pale violet red line of the Random walk index Metatrader 5 forex custom indicator break above the lime green line.
Exit buy trade: Close all buy orders if while a bullish trend is ongoing, the lines of the Random walk index MT5 forex indicator intersects.
Exit sell trade: Close all sell orders if while a bearish trend is ongoing, the lines of the Random walk index MT5 forex indicator intersects.
Tip: The Random Walk Index determines whether a security is in an uptrend or downtrend.
MT5 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 5
Type: chart window indicator
Customization options: Variable (Random walk index period), Colors, width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Type: oscillator | trend
Copy and paste the Random walk index.ex5 indicator into the MQL5 indicators folder of the Metatrader 5 trading platform.
You can access this folder from the top menu as follows:
File > Open Data Folder > MQL5 > Indicators (paste here)