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.
RANDOM WALK INDEX FORMULA:
High = MAX((High - Low(n)) / (ATR(n) * SQRT(n)))
Low = MAX((High(n) - Low) / (ATR(n) * SQRT(n)))
The random walk index (RWI) by E. Michael Poulos is a measure of how much price ranges over N days differ from what would be expected by a random walk (randomly going up and down).
A bigger than expected range suggests a trend.
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