Last updated: 8 October 2026. Every screenshot below was recorded on 8 October 2026 on an IQ Option Practice account registered in Brazil, on EUR/USD 5-minute candles; the Chart analysis picture in Step 1 was recorded on 5 October 2026. We placed no real-money trade. The settings come from the platform’s dialog and the calculation from the published source code of the platform’s built-in indicators (Quadcode’s script library). The tested box shows what the two readings, a line above 1.0 and the crossover of the two lines, did on EUR/USD 5-minute candles recorded between 29 September and 5 October 2026; it says nothing about what will happen next.
The Random Walk Index (RWI) asks whether a price move is bigger than a random walk would produce. For each candle it measures how far the high is above an earlier low, and how far the low is below an earlier high, in units of the average true range times the square root of the number of candles, and keeps the largest value over the last 2 to 14 candles. On IQ Option the two results, RWI High (green) and RWI Low (red), open in their own panel under the price chart. Above 1.0 the move is bigger than chance would give: an uptrend for the RWI High and a downtrend for the RWI Low. On 5-minute EUR/USD candles the RWI High was above 1.0 on 38% of the candles and the RWI Low on 48%.
Quick answer
- What it plots: two lines in a panel under the price chart: RWI High (green) and RWI Low (red).
- Formula: RWI High = the largest, over n = 2 to the Period, of (high − low n − 1 candles ago) ÷ (ATR(n) × √n); RWI Low = the largest of (high n − 1 candles ago − low) ÷ (ATR(n) × √n).
- Settings on the platform: one, the Period (14).
- Reading: the RWI High above 1.0 is an uptrend and the RWI Low above 1.0 a downtrend; both below 1.0 mean a random walk. The crossovers of the two lines are also used.
- Where: the Trend list of the Chart analysis panel; search for Random Walk.
- Tested: the trend reading (a line above 1.0 while the other is below) gave 203 signals and won 49.2% of the decided trades with a 5-minute trade and 54.2% with a 15-minute trade; its crossover gave 274 signals and won 46.9% and 52.4%. Break-even is 54.1% at an 85% payout, and a few days of one pair prove nothing.
How do you add the Random Walk Index on IQ Option?
Set the chart
Choose the asset, the chart type and the candle size first: the indicator is calculated from the candles on the chart. The examples in this guide use 5-minute candles on EUR/USD. These steps use the web traderoom on a Practice balance, and the numbers in each screenshot match the numbers in the text. If you do not have an account yet, see how to register.
Step 1: Open Chart analysis
Click the indicators button (1), the wave icon in the chart toolbar at the bottom left of the chart. The Chart analysis panel opens with the tabs Indicators, Templates, Widgets and Scripts. Stay on Indicators.
Step 2: Find Random Walk Index
Type “Random Walk” in the Search for indicators box (1), or open the Trend list, and click Random Walk Index (2).
Step 3: Check the settings
The dialog has the tabs Basic settings (1), Colors and display and Script. The Period (2) opens at 14, the longest look-back, in candles, that the two lines search.
Step 4: Check the colours and click Apply
Open the Colors and display tab (1). The tab has two rows: RWI of High, green by default, and RWI of Low, red by default; each has a checkbox that shows or hides the line, a colour box and a line-style box. Click Apply (3).
Step 5: Read the panel
The two lines are drawn in their own panel under the price chart. The title bar of the panel reads Random Walk Index (14), the name and the period, followed by the settings, eye and close icons (1). The scale at the right edge shows 2 and 1, with a grey line at 1, the level that separates a random walk from a move bigger than chance. The RWI High is the green line and the RWI Low the red one (2).
How is the Random Walk Index calculated?
For each n from 2 up to the Period, the Quadcode source computes a distance and a scale. The distance for the RWI High is the high of the candle minus the low of the candle n − 1 candles earlier; the scale is the average true range over n candles times the square root of n, which is the typical size of a random move over n candles. The ratio of the two says how many random-walk units the price has climbed. The RWI High is the largest of these ratios for n from 2 to the Period. The RWI Low does the same with the high n − 1 candles earlier minus the low of the candle, which measures how far the price has fallen.
| Part | Default | What it does |
|---|---|---|
| Period | 14 | The longest look-back, in candles, that the two lines search |
The indicator is credited to Michael Poulos, who first published it in the 1990s; it determines whether the price follows a random walk or forms a significant trend by comparing price movements with random movements. The RWI High measures the climb of the price, which is the uptrend, and the RWI Low its fall, the downtrend, as the formula shows.
How do you read the Random Walk Index?
These are the usual readings. A line below 1.0 means the price is fluctuating randomly; above 1.0 a trend has formed. An uptrend is identified when the RWI High is above 1.0 and a downtrend when the RWI Low is above 1.0. The crossovers of the two lines are sometimes used as signals; they give good results when the trend is strong and poor results otherwise, and other tools should be added. The RWI is often compared with the ADX and its +DI and −DI lines; short-term traders and scalpers usually use 2 to 7 periods and long-term investors 8 to 64.
What did it look like on 5-minute candles?
We replayed the library script on EUR/USD 5-minute candles recorded from the Practice traderoom: 1,093 candles from 29 September 2026 (01:55 UTC) to 2 October (20:55 UTC) and 241 from 4 October (21:00 UTC) to 5 October (17:00 UTC). We skipped the first 20 candles of each stretch, which leaves 1,294 candles.
- Above 1.0: the RWI High on 488 candles (38%) and the RWI Low on 622 (48%); the largest values were 2.22 and 2.73.
- Crossovers of the two lines: 276, about one every 5 candles.
Two stills of the platform, window A (the Step 5 picture shows its two ends) and window B (not pictured), agree with the replay: read off the chart at 259 points of the two lines in the two windows, the lines differed from the replay of the script by 0.01 on average and by 0.05 at most. In window A, 29 September from 06:14 to 11:58 on the platform clock, the RWI Low starts above 1.0 (1.50 at 06:15, with a high of 1.67 at 06:20) and falls to its low of 0.11 at 07:50, while the RWI High climbs to 1.44 at 08:00; later the RWI Low comes back to 1.44 at 09:40, and at 11:55 the two lines end at 1.26 (RWI Low) and 0.40 (RWI High). In window B, from 11:27 to 17:11, the RWI Low reaches 1.93 at 14:00, while the RWI High has just touched its low of 0.04 at 13:50; the RWI Low then falls to 0.26 at 15:10 as the RWI High rises through 1.0 to 2.06 at 15:25, and at 17:10 they end at 0.94 (RWI High) and 0.60 (RWI Low). (A point is drawn at the close of its candle: the value of the candle that opened at 07:45 sits at the 07:50 mark.)
The two readings, tested
We wrote the readings as exact rules on closed candles, with the option opened at the close of the signal candle. Trend: Higher on the candle where the RWI High rises above 1.0 while the RWI Low is below 1.0; Lower on the candle where the RWI Low rises above 1.0 while the RWI High is below 1.0. Crossover: Higher on the candle where the RWI High crosses above the RWI Low, Lower where it crosses below. No expiry is given, so the box shows five minutes and fifteen minutes, and the trend rule at period 7, in the 2 to 7 range that is usual for short-term trading.
Tested on IQ Option: the Random Walk Index, EUR/USD 5-minute candles of 29 September to 5 October 2026
| Asset and candles | EUR/USD binary (regular, not OTC): 1,334 five-minute candles (2026-09-29 01:55 to 2026-10-02 20:55 UTC and 2026-10-04 21:00 to 2026-10-05 17:00 UTC). The candles were recorded from IQ Option’s Practice traderoom. The replay places no orders; it only scores the rule on those closed candles, at an 85% payout. |
|---|---|
| Rule tested | The readings on closed candles, the option opening at the close of the signal candle. Trend: Higher on the candle where the RWI High rises above 1.0 while the RWI Low is below 1.0; Lower on the candle where the RWI Low rises above 1.0 while the RWI High is below 1.0. Crossover: Higher on the candle where the RWI High crosses above the RWI Low, Lower where it crosses below. The first 20 candles of each stretch are skipped. No expiry is given, so the box shows 5 and 15 minutes on 5-minute candles, and the trend rule at period 7, in the 2 to 7 range that is usual for short-term trading. |
| Signals | RWI above 1.0 (trend), period 14, 5-minute, 1 candle: 203 signals (94 Higher, 109 Lower) RWI High/Low crossover, period 14, 5-minute, 1 candle: 274 signals (137 Higher, 137 Lower) RWI above 1.0, 5-minute, 3 candles: 203 signals (94 Higher, 109 Lower) RWI crossover, 5-minute, 3 candles: 273 signals (136 Higher, 137 Lower) RWI above 1.0, period 7, 5-minute, 1 candle: 257 signals (122 Higher, 135 Lower) |
| Outcomes | RWI above 1.0 (trend), period 14, 5-minute, 1 candle: 98 won, 101 lost, 4 tied; 49.2% of the 199 decided trades won; net −$0.09 per $1 staked at 85% (−$0.06 at 91%) RWI High/Low crossover, period 14, 5-minute, 1 candle: 127 won, 144 lost, 3 tied; 46.9% of the 271 decided trades won; net −$0.13 per $1 staked at 85% (−$0.10 at 91%) RWI above 1.0, 5-minute, 3 candles: 110 won, 93 lost, 0 tied; 54.2% of the 203 decided trades won; net +$0.00 per $1 staked at 85% (+$0.04 at 91%) RWI crossover, 5-minute, 3 candles: 143 won, 130 lost, 0 tied; 52.4% of the 273 decided trades won; net −$0.03 per $1 staked at 85% (+$0.00 at 91%) RWI above 1.0, period 7, 5-minute, 1 candle: 120 won, 133 lost, 4 tied; 47.4% of the 253 decided trades won; net −$0.12 per $1 staked at 85% (−$0.09 at 91%) |
| Break-even | At an 85% payout a trade needs to win more than 54.1% of its decided trades to break even (1 ÷ 1.85); at 91%, more than 52.4% (1 ÷ 1.91). |
A replay is only a look back at candles recorded on the dates above: it placed no real orders, covers about four and a half days of one pair, and counts overlapping trades as if they were independent. A short test proves nothing about the future, and no profit and no win rate is promised here. IQ Option’s own blog on backtesting says that most strategies need dozens, and often hundreds, of trades before a result means anything.
With a trade of one candle (5 minutes) the trend reading gave 203 signals and won 98 of the 199 decided trades (49.2%), and the crossover gave 274 signals and won 127 of 271 (46.9%). With a trade of three candles (15 minutes) the figures were 54.2% (110 of 203) and 52.4% (143 of 273). At period 7, with a 5-minute trade, the trend reading gave 257 signals and won 47.4% (120 of 253). Break-even is 54.1% at an 85% payout: the 15-minute trend reading is on it by a tenth of a point, with a 95% interval of 47% to 61%, and the other four results are below it, but the intervals of the crossover with 15-minute trades (46% to 58%) and of the trend reading with 5-minute trades (42% to 56%) include it too.
Pros and Cons of the Random Walk Index
| Pros | Cons |
|---|---|
| A clear threshold: 1.0 is the border between a random walk and a move bigger than chance. | On a 5-minute chart the lines were above 1.0 on 38% and 48% of the candles, so the threshold is crossed often. |
| Two lines that tell the climb and the fall apart. | The two lines cross about every 5 candles, and the crossover is usually read as poor when the trend is not strong. |
| One setting, the longest look-back. | It lags, since it uses moves that already happened. |
Common mistakes
- Swapping the two lines. The RWI High is the climb and the RWI Low the fall.
- Calling every value above 1.0 a tradable trend. It was above 1.0 on almost half of the candles in our recording.
- Trading the crossovers in a range. They bring poor results without a strong trend.
- Changing the period to fit one chart. A period of 2 to 7 is usual for short-term trading; we ran 7 and 14.
Related guides
- Vertical Horizontal Filter and Aroon
- ADX and EMA strategy and Trend Intensity Index
- Identifying a trend and trading a ranging market
- All indicator guides and all strategy guides
Frequently Asked Questions
Q: What is the Random Walk Index?
A: An indicator that compares the climb and the fall of the price over several look-backs with the move that a random walk would produce. It is credited to Michael Poulos.
Q: What settings does the Random Walk Index have on IQ Option?
A: One: the Period (14); the colours of the two lines and their visibility can be changed on the Colors and display tab.
Q: What does 1.0 mean?
A: A move as big as a random walk would give. Above 1.0 the move is bigger, and it is read as a trend.
Q: Which line is the uptrend?
A: The RWI High, green by default.
Q: How do I trade the crossovers?
A: They are used as signals when the trend is strong. The results of the rule, on a chart where the trend was often not strong, are in the tested box.
Q: Can I use the Random Walk Index on binary options?
A: The platform draws it on any chart. Whether a rule works is something to test on the Practice balance with the expiry you plan to use.
