Asking the question, what is the best Renko trading indicator probably isn’t going to lead to profitable day trading. I don’t think that is how to use Renko charts for day trading by looking for a single best indicator.
However, if someone asked me about choosing the best Renko trading indicator[s] for developing a day trading method – that question I could answer. I would use a combination of different but related Renko indicators that could be combined into a method trade setup.
You would then evaluate the effectiveness of the indicator combination by seeing how often the price would continue to a profit target after your Renko trade setup gave you a trade. For instance, can your trade setups consistently make a profit 60% of the time or more, with your average winner bigger than your average loser?
My experience is that trade setup combinations are much more effective than single indicators, and I don’t know of a single trading indicator that would be as profitable. In that context, I think of Renko trading indicators as providing trade method setup information. This is in contrast to trading an indicator as a mechanical system.
Best Renko Trading Indicator Combination
We will look at what I have found as the best indicators for Renko chart day trading.
We use a combination of 3 Renko day trading indicators – these are seen on the chart below.
These indicators are related in that they all give information about price momentum. And that is what I have found as the best Renko indicator combination for price continuation – combining momentum into trade setups. Due to the importance of momentum and how it tends to lead to price continuation, our method will not take a trade against momentum.
- The indicator on the Renko bricks is a price envelope above and below a moving average midline.
- The momentum component determines whether red dots or green dots are showing and when they shift from red to green or green to red.
- The 2 indicators below the chart are both momentum indicators
- The yellow indicator is fast momentum, and the blue-purple indicator is slow momentum
- It is interesting to note that the slow momentum Renko indicator is a smoothing of the momentum factor that causes the price envelope dots to shift
- And that is an example of what I mean about selecting related indicators that combine to give trade setups
Renko Trading Indicator Combination Video
Now let me show you one of our trade method setups and the Renko trading indicator combination for the trade:
- Price envelope reverse buy
- Fast momentum will have moved above the lower extreme and lead slow momentum.
- Slow momentum has crossed with the blue line on top of the purple line
- Price envelope dots shift from red on top to green on the bottom
- You can see how momentum led the price as it reversed from the low extreme and went positive
- Enter the trade with a stop at the high of the completed brick-1 tick limit into the next brick
We have 2 other Renko trading indicator setups that were also traded on this chart. I will discuss these in another video while introducing you to our trade setup filter conditions, which we use to avoid trades.
Click the Link to Watch the Video: Best Renko Day Trading Indicator Combination
Click the Link to Watch the Video: Renko Day Trading Indicators Combination Strategies
How do I join the group, or download your indicator. I came across your website n like what you r teaching.
George, if you will go to the following webpage and scroll down to the bottom of the page – you will see the link for the indicators and joining the group.
https://renkocharttrading.com/renko-chart-day-trading-strategies/