The Renko chart trade setups are a combination of the Renko trading indicators, or what I think of as the trade setup components. As all the trading indicators have a momentum component added to them, trading them in combination increases the odds of Renko trade profitability.
Additionally, each Renko trade setup is ‘checked’ against our method trade setup filters. The Renko trade setup filters further increase trade odds, by eliminating trades against momentum, or trades into a resistance or support price.
Renko Chart Trade Setups
There are 3 Renko trading method setups. These setups are identified on the chart below, and are further discussed in the Renko method video:
- Price envelope reverse [A] – dot shift from green to red|red to green
- Midline reject [B] – red-green-red|green-red-green Renko brick pattern, where the counter brick tests and rejects the price envelope midline
- Price extreme reverse [C] – 5 or more consecutive bricks followed by a counter brick, after the last price envelope reverse or Renko trade setup
It would appear that the Renko trading method setups are single component trades, however, this is not the case. Before a trade is actually taken, there are a combination of multiple setup components of the Renko method trading indicators, along with the trade setup not being filtered by momentum or price.
Consider the price envelope reverse and what makes it a multiple component Renko chart trade setup that is tradeable:
- Price envelope indicator reverse from ‘sell’ to ‘buy’
- The trade must be entered on a green brick, since it is a buy [do not enter trades on counter bricks]
- Momentum extreme [MEx] indicator below lower extreme line and blue line crosses purple line
- No trade setup filter – there must be at least 3 Renko bricks of room to a resistance price [and the momentum trade setup component must be satisfied]
Renko Chart Trade Setups Video
The Renko method video below will discuss the Renko trading method setups, along with their multiple components. I will also discuss any trade setup filters that may occur, where what would otherwise be a trade was avoided.
Click Link To Watch Video: Renko Method Trade Setups