Renko Chart - How to Trade Using Renko Charts

Category: Forex Basics | Saturday, May 24th, 2008

Download Renko chart indicator for MT4 or MetaTrader platform: Click Here

Do you really have to consider the time or volume in your trades or you can also trade according to the price changes only? This question is the foundation of the Renko charts. Renko charts are invented by the Japanese. In this chart, time and volume has no role. Renko candles look like small bricks or boxes. They have no upper or lower shadows. We can change the box size in the Renko charts.

The smaller the size, the higher number of boxes and so more details of the price changes.This is the Renko charts of Euro-USD while the box size is set to 1:

Renko Chart

And this is the same chart while the box size is set to 0.5 which means smaller boxes and so more details of the price changes:

Lets see the above chart with a higher magnification to see more details:

The above chart covers about 2 years from Sep 2004 to Sep 2006. As you see there is a limited number of trading opportunities in this chart. The technical analysis rules are the same in the Renko charts and you can enter a trade after a support, resistance or consolidation breakout:

Lets check a smaller box size and see if we can find more trading opportunities or not.

The box size in the below Renko chart is set to 0.1. As you see your can easily find good trading opportunities using the technical analysis rules:

Now lets compare the above chart with a candlestick chart. The below chart is the candlestick chart that covers the same period of time as the above chart. As you see the short trade could be easily distinguishable in the candlestick chart but it was a little hard to decide for a long position after that. Whereas the above Renko chart shows the long opportunity very clearly.

What does that mean? Does it mean that you can find more trades in the Renko chart?

I can not see any clear inverted head and shoulders in the above candlestick chart whereas it could be seen sharply in the Renko chart.

Another period of time with the Renko chart:

The same period of time with the candlestick chart:

So if you are a swing trader and you work with the big time frames like the daily chart, you’d better to have an eye on the Renko chart too. It seems it is a big help to confirm your technical analysis results and predictions.



Was this article useful?
Let my latest articles be delivered to your inbox automatically. Enter your email address here and click on the subscribe button. You can unsubscribe at any time and your email will not be given to any third party:


You can also subscribe for my feed:  Subscribe in a reader

Did you know that ...
... you can learn to trade Forex and make money at the same time? Click Here to learn how.

Further Reading:

 
14 Comments:
post a comment
Comment by Paul
2008-05-25 07:42:01

Hi Vahid,
You’re back! Fantastic - where have you been - we’ve missed you.
Will you start your daily analysis again - I hope so
Best regards
Paul

Reply to this comment
 
Comment by Satish
2008-06-18 04:40:29

Hi Vahid

I got into you site by search of Renko ..
Here you have done good job in analysing the forex, for me it is tough to enter there.
Appriciate your work.

Thanks to your input and I had read about the Renko Chart , but I am not finding Renko free charts , can you refer me where any site where they offer us to try out this chart for index and forex with other indicators like , RSI , STO…

thank you in advnace

Satish K

Reply to this comment
 
Comment by onlydragon
2008-07-30 02:11:51

hi vahid,
i have a question want to ask you about renko , how can u use multiple timeframe with renko.
And this is my system i usuallly try with renko 1h 20 pips per box, at least 2 red and only one green then buy, at least 2 green and only one red then sell

Reply to this comment
 
Comment by murugasamy
2008-08-24 05:33:56

sir
iam stock market trader india
how to input value boxsize please repply

thanks
muruga

Reply to this comment
 
Comment by pavan
2009-03-05 12:58:45

Hi vahid,

I have recently found this website. Great training material. I was wondering if you can send be a link to download renko indicator for meta trader platform.
Great job with the forex training stuff.
Thanks
don

Reply to this comment
 
Comment by skougiou
2009-06-22 15:23:31

Hi,
how can I use the renko ‘version’ of the various ‘end-of-day’ charts/instruments that you list on your site?
Thanks.

Reply to this comment
 
Comment by Greg
2009-09-29 23:45:33

What a great site, I have just discovered it today and am amazed at the information you provide. Thank you so much.
Like the other posters here, I would love to know how to get renko onto my metatrader charts?
Thanks again.

Reply to this comment
 
Comment by Elyse
2009-10-23 17:21:44

Thank you for excellent information. I’ve just printed off many of the articles and I will review them and then give some more comments. Basically just wanted to thank you for being so generous in having this information available to me. I am a new trader and this basic information will help speed up my learning time.

Reply to this comment
 
Comment by Osa
2009-11-23 16:58:57

Hi, thanks for this. But could you please give a bit more details, such as what time frames (higher or lower) would be most suitable? And what would be the best setting? The one you provided for download only allow changes to ‘Porog’, and it’s not like the one you mentioned as 1 or 1.5 or 0.5. The default is 40 and on 4H TF it doesn’t seem to suit actual price actions. I tried to change it to 15, 20, 25, 30, 35 with mixed results, and it’s different for different pairs too. A bit more advice would be very helpful indeed.

In addition, the downloadable indicator is only its .ex4 file. Would it be possible for you to provide its .mq4 format? With that, it is easier to set the changes in coding without having to go through the customising window every time.

Many thanks!

Reply to this comment
 
Comment by Dilip
2009-12-09 12:27:21

Dear Sir,
I downloaded your Renko indicator.
It does not take decimal point for box size.

Reply to this comment
 
Comment by toms
2009-12-11 03:36:17

You know, renco looks good on your charts, but not in MT4. In MT4 it’s just don’t understandable. You give for us good lessons, but this indicator for MT4- useless.

Reply to this comment
 
Comment by Efosa
2010-07-19 23:54:04

Hello VAHID, thank you for your assistance to all forex professionals. Please I want you to please tell me the benefits of your live program.

Reply to this comment
 
Comment by matthew riesim
2010-08-18 07:17:24

hi,
do you recommend i use 100 pips as box size for the major currency pairs?

what box size would you recommend if i plot renko on cash mkts like djia and s&p500 or futures mkts like cbt’s sb, sbm and sbo?

thank you and look forward to hear your comments

matt

Reply to this comment
Comment by Vahid
2010-08-18 14:25:53

Hi Matt, I think 100 is too much. You need to backtest different settings for different currency pairs and commodities. A setting that works for one, may not work for the other.

Reply to this comment
 
 
Name (required)
E-mail (required - never shown publicly)
Your Comment (smaller size | larger size)





© 2010 vTrades Inc.
Forexoma.com website is maintained by vTrades Inc. which is a company owned and operated by Vahid.
Read the Disclaimer and Risk Warning before using www.forexoma.com information, products and services.
You may post a link to the articles contained on this site, however, you are not allowed to post full articles from www.forexoma.com on any other website or blog. Violators will be prosecuted.