Renko Brick Price Action And Trade Setup Entry

When Are Renko Trade Setups Clear On The Chart?

Renko brick price action shows trade setups before the completed brick.  And this can allow for more timely Renko trade entries – see the 2 charts below:

The Renko trading charts show trade setups at yellow circles 1-2; yellow circle 3 was a potential 3rd setup:

• When was the Renko trade setup in real time?
• When was the trade entry?

Renko trades occur when bricks are complete.  However, Renko brick price action shows the trade setups in real time.  Anticipating trades allows earlier entry.

 Renko Brick Price Action Video

Anticipating Renko Trades

A Renko method trade is based on the setup components:

• Midline reject setup [yellow circle1] – slow momentum flow with a fast momentum hook.
• Price extreme reverse [yellow circle2] – 5+ bricks after the last setup with slow momentum above [below] the extreme line.

The price envelope reverse setup [yellow circle3] would not be traded:

• No slow momentum line cross.
• No completed green brick with the price envelope green dot.  The Renko trading method does not buy red bricks.
• But note the real time price action.
  • The red brick began as a green brick.
  • The price envelope dot was green.
  • The slow momentum lines were crossing – they re-opened when the Renko brick completed red.

Anticipate the 3 Renko setups and place trades.  Yellow circles 1-2 will enter when the bricks are complete.  However, there is no trade for yellow circle3 – the brick did not complete as a green brick with the necessary setup components.  Therefore delete the trade entry.

Real Time Renko Brick Price Action

There are 2 types of Renko charts: (1) classic charts that only show completed bricks and (2) custom charts that also show price wicks.  Price wicks indicate price action.  For example, before a red brick completes, it is green, and a green brick is red.

Classic charts do show this while the bricks are forming.

Look at the right side chart section and the completed bricks.  This correlates with the Renko price wicks and the real time brick price action.  Note the Renko brick price action, especially note yellow circle1-2.  This is a brick movement counter to the Renko trade entry direction.

• Yellow circle1:  the green entry brick was first a red brick.  The Renko buy brick was 8 ticks lower.
• Yellow circle2:  the red entry brick was first a green brick of 2 ticks.  The Renko sell brick was 8 ticks higher.
• Yellow circle3:  the red brick-green price envelope was first a green brick of 1 tick.  Place the Renko buy, then cancel the trade on the red brick.
  • Note the slow momentum white arrow – slow momentum had crossed in real time while the brick was green.

Using Renko brick price action has the effect of slowing down the Renko chart.  This is because it can quickly complete regardless of the length of time for a brick to form.   Enter a trade for the setup before the completed brick.

 Renko Brick Price Action Video2