Renko Chart Trading: Learning To Trade With Renko Charts

Learn Renko Chart Trading

What Is Renko Chart Trading?

Renko chart trading is a method that focuses on the unique characteristics of price charts. What makes these charts and this style of trading unique?  Unlike traditional bar and candlestick charts, price charts do not use time intervals or volume.

Instead of time or volume, trading is done with Renko bricks made from predetermined settings. Since the setting size does not change on the chart, all Renko bricks are the same size. 

Compared to traditional charts, price charts can give a clearer read of price movement, which is a benefit of Renko chart trading.  

Renko British Pound Future Day Trading Chart

As a trader focusing on price and momentum continuation, I do not care about time frames.  I like the visual symmetry and clarity of having bricks the same size.  The charts are simpler to trade by seeing consistent price movement and patterns. Minor moves that are smaller than the brick settings are filtered.

Look at the Renko charts below, compared to a candlestick chart with a time interval of 5 minutes. You will see examples of what intrigued me with Renko chart trading.

Renko Trading Charts Compared To Candlesticks

Why use Renko charts for trading?

In this first example, you are looking at 2 hours. Both of the charts have about the same number of bars or bricks.

It is clear how structured and concise the Renko bricks look on the chart. Although the candlesticks may show the general up and down direction, the price movement is not as distinctive.

This is especially the case where you get to the period of numerous overlapping bars followed by the downward reverse. This kind of price movement seems random and hard to apply trading strategies to.

Consider a Renko chart trading strategy, where after a set number of consecutive red or green bricks, you would buy or sell the next counter brick. While you could apply this strategy to this Renko chart, you would have no way to see similar setups using the candlesticks.

Renko Bricks Show Clarity And Patterns Not Seen On A Candlestick Chart

Unlike the first chart, where both charts have about the same number of bars and bricks, there is a big difference during the time interval for the next 2 charts.

Look at how many more candlesticks there are than Renko bricks in these 3.5 hours.

Renko Bricks Compared To 5 Minute Candlesticks

Renko Bricks Compared To 5 Minute Candlesticks

This is another example of the clarity you get from Renko charts, especially during sideways moves or periods of small price movement.

You will continue to get new bars [every 5 minutes on these charts], while a new Renko chart brick won’t complete. For instance, there are Renko bricks that were completed in around 1 minute, but there are also bricks that took over 15 minutes to be made.

I have found this characteristic of price charts where minor price moves are not seen to be an advantage for Renko chart trading.

Renko Chart With Indicators

The Renko chart now has my indicators with the yellow circles showing the Renko setups during the period.

Renko Chart Trading Indicators And Day Trade Setups

I will further discuss these indicators and trade setups along with the method basics for learning Renko chart trading in the video below.

Among other information, you will learn why I think that the best indicators for trading Renko charts are momentum indicators. Each one of our 3 trading indicators is based on momentum resumptions or momentum reverses:

Learning To Trade Renko Charts

When learning Renko chart trading, think of a method and not a mechanical system. You will not be trading indicator signals.

You will learn how the Renko indicators are components for trade setups but also learn filters for avoiding trade setups that should have lower odds of success.

For instance, consider the example of a basic Renko trade setup called the price envelope reverse. This setup is easy to see on the chart:

  • The price envelop indicator will reverse its dot color and either shift to red on the top or green on the bottom.
  • The slow momentum indicator [blue-purple lines] will also cross in the direction of the trade.

But also consider that the setup is right into a support or resistance price. You would filter the Renko price envelope reverse for the trading price, and the trade would not be made. Besides price, you will learn to filter trades for momentum and market consolidation.

Click the link below for a video discussing these charts and the outline. You will also find a link for learning more about our Renko position trading method for the SPY and QQQ ETFs using options.

Renko Chart Trading Method Basics

Renko Chart Trading Indicators And Trade Setups

Video:  Learning Renko Chart Trading
Renko Position Trading With Options

Related Articles

Renko Options Short Strangle - What Is The Assignment Risk At Expiration
Renko Options Trading

Renko Options Selling: Short Options At Expiration And Margin

Renko Options Trading

Renko options selling trading strategies are used for SPY QQQ underlying trading. These are synthetic option positions where long options are combined with short options to emulate the underlying. While the positions have the same profit and loss profile as a SPY QQQ position trade, there are other considerations because they are options.

 

To begin with, selling uncovered options, especially calls, have margin and approval requirements. Additionally, traders must understand what happens to their short options at expiration and manage them accordingly. Short in the money options can be assigned, leading to unwanted long or short positions in the underlying.

[Read More]

34 Comments

  1. Hi Barry ,
    Do your indicator work on all the Instrument in Ninja Trader?As I am trading in Indian Stock Market.

    • The indicators work on the Ninja Trader program itself – it does not matter what market you are charting.

  2. Hi Barry

    Really enjoyed your videos and am strongly considering becoming a member.

    Question 1: If I subscribed for a couple of months and then stopped would I still have access to the indicators or would they be deactivated?

    Question 2 – can you tell me, or is there a video (I admit I haven’t watched them all!) that describes, what percentage of a position you take at each partial profit point. Maybe a third at partial 1, third at partial 2 and then leave the remaining third to hit stop exit? or 50:30:20? I guess the ratio is down to personal preference / trading style?

    Many thanks
    Marcus

    • Hi Marcus (1) The trading indicators are included with the subscription so deactivated – however, if you still wanted them you would have the opportunity to purchase (2) management is included in the training videos – your question is a function of your trading size but consider trading 2 initial contracts: (a) you would take a partial at a fixed target of 4 bricks (b) you would trail your remainder at a fixed target of 8 bricks or a retract-full brick close under the midline [indicator] or a trade reverse in the other direction.

      Let me know if you have any other questions.
      Barry

  3. Great trading method but how can I use these indicators for MT4.
    I’ve been using mean renko bars for a while with no filter but this just puts the icing on the cake… How can I use these filter indicators on MT4?

    • Hi Scott – I am sorry but I do not have these indicators coded for MT4. If you wanted to give it a try, NinjaTrader would be your best alternative.
      Barry

  5. Please allow me to follow up as well…
    As a career college professor–teaching at both “traditional” and online institutions–I agree with all of the positive comments regarding the quality of the teaching material here. It is well thought-out and clearly explained; not easy to do when presenting something as fluid and unpredictable as market price action! Thanks for providing access to the career’s worth of insights you’ve gained; sharing your knowledge is a wonderful way to pay it forward on behalf of all of us!

    • Welcome to our trading group and thank you for your kind words and compliments; I appreciate them. I saw your other comment regarding your membership and your 2 email addresses. I sent your ‘start-up’ information and indicator download + member video access to your Paypal email – let me know if you want me to use the other email instead.

      Barry

  6. Barry,
    Thank you for the wonderful information and learning on this website.
    I am mainly trading stocks and options using fidelity and trading view charts. After learning about Renko charts I tried them on a trading view free platform. I liked it.
    Question: How do I get these indicators for the tradingview? the only reason I like trading view charts is that it can quickly load in the phone too. is there any other way of getting Renko with these indicators?
    If I have to pay for these indicators then how and where?

    I also tried downloading Ninjatrader but it seems like it only works in windows and not on Mac.
    I am a new trader so very confused and overwhelmed.

    Please help me understand.
    Thanks
    Yatin

    • I am glad to hear you are getting some benefit from the website. I traded futures using tick charts for years and then became interested in Renko charts in 2011. I ended up restructuring my trading method and indicators for them and have continued to use them for day trading since them.

      I am sorry but I have no support for the Tradingview program, so there is no indicator availability for it. Regarding Ninjatrader and a Mac, I am aware that NT cannot be directly downloaded on to it – but I did see the following on the NT website:

      There is no installation file that allows NinjaTrader to be installed directly on a Mac. NinjaTrader runs on the .NET framework which requires a Windows operating system. Ninjatrader can be run on a Mac by either installing Virtual Machine software or Apple Boot Camp to run windows on top of Mac hardware.

      Maybe that would help,
      Barry

  7. Hi Barry.
    It seems there is no trade room for the group, have you ever considered opening one?
    Dave

    • Hi David, I actually had a trading room for around 14 years. But I then decided that I wanted to do some different things but still have a teaching site, so I reduced the cost accordingly and changed to video trading method training + trading indicators.

    • For NT, renko bricks with bricks is an addon bar-brick type. I did this a couple of years ago but never really used it and stayed with the classical bricks.

  9. Are the indicators you provide OPEN CODE so that I could integrate them into a Tradestation strategy file? Or are they password protected so we can only have the output and not have any ability to see, modify, and integrate the EasyLanguage code into another trading indicator or strategy?
    Please advise.

    • Sorry, but the indicator code is not available – only a working set of indicators.

  10. Hello Barry,
    Renko bars do look good in hindsight but I always found it very difficult to trade on the right edge……I’m so glad that you have developed a method to trade these fantastic price action bars!
    a) Are the indicators for NT8 as well or only NT7?
    b) Is there any “live” training for members or only through posted videos? I was specifically interested in determination of the “price levels” which are used to filter trades, i.e. what are the different kinds of “price levels” that are used as there can be a multitude (prev day OHLC, current day HL, Dbl Tops/Btms, etc. etc.)
    Looking forward to subscribing soon.
    Thanks

    • I have felt that Renko bricks were just another way of viewing tick data charts but doing so by using price only. I agree with you that trading is best done across the chart -vs- the last right side brick-bar.

      These indicators are definitely for NT8. There is no chatroom at this time, just the trading videos. But those videos do go through the charts-trades brick by brick to discuss them as real-time as possible.

      Price levels are a combination of the outside extreme prices, like a high or low – along with inside price action and/or swing prices like a double top-double bottom and what I think of as shift prices or a support price that breaks and shifts to resistance-resistance that support and shifts to support. Price filters and filtering for consolidation are a big part of the trading videos.

  11. Good day Barry,
    This your Renko set up and the indicators, can they be installed on the mt5? And can they be used for any instrument like forex, stocks, futures, binary and everything? Or are they designed specifically for an instrument? Also, why is it a recurring subscription, and why not a life time software? Just asking.

    • No, these indicators have been coded for ninjatrader and tradestation only. To answer your other questions: (1) I have only traded Renko charts and these indicators on futures, predominantly the British pound, oil, emini dow, or emini Russell (2) this is a recurring subscription because payment is for a training service that includes the trading indicators and not for an indicator purchase.

  12. Hello Barry I found your renko combination of indicators video is very useful. I know about renko little bit & developed AFL to do robo trading in MCX crude oil intraday trading. But to capture the trend I need the additional indicator. You have mentioned about momentem dots green / red. But i could not find the same in MT4 chart. can you suggest me where can i get ?

    • Balaji, the renko indicators have been developed for our method and are accessed by members of our training group. These indicators have been coded for ninjatrader and tradestation but sorry, they are not available for MT4.

  13. Barry, great site and lots of good training material – A class!
    I started researching Renko charts before I found your site. I like the fact that Renko is price based (not time based) and helps in the reduction of noise. I’m new to trading so all your material is good for my study and then for possible implementation.
    I would like your response on a couple of things as related to your training materials. Some background:
    1) I’m not a day trader, so classify me more as a swing trader (days – weeks) that would act on chart closing prices. It seems I would focus on swings (pull backs within the trend) and also breakouts.
    2) The amount of info you present is over whelming, but good. Given my trading orientation, could you give me a list or map of applicable training videos (I have only reviewed 3 videos). I believe your materials could be applicable or with some modifications to swing trade.
    3) Have you ever traded Renko 20/50 EMA crossovers?
    So I’m ready to start your training on Renko charts. Just to let you know I’m no expert, so you can tell me if I’m all wet on my ideas and approach! But I sure like what I see of Renko.
    Regards, Robert Schoo.

    • Hi Robert, thanks for contacting me and the words you had about the depth of the materials on the site; I appreciate it.

      I agree that there are benefits for using a Renko chart in day trading, and yes for position trading too, which seems to be your preference – that being said, I do both of these but try to do so using the same method basics as much as possible.

      I also received your email and will reply to you at greater length,
      Barry

  14. Hi Barry,

    I’m new to this forum and trying to create a strategy that would work for day trading.
    I use Metatrader for charting and would like to know if you have any indicator for MT4/MT5.Thanks

    • Hi Kumar,

      No, I only have coded the indicators for NinjaTrader and TradeStation. I could only suggest that you use NinjaTrader for charting, which you can download for free – and then do your actual trades using the platform you are using now.

    • These indicators come as part of subscribing to the membership group…

      As a member you will receive my trading indicators that have been coded for NinjaTrader and TradeStation. As well you will get access to all of the method member training videos; there are 2-3 new videos that are done each week.

  16. Something else that I forgot to mention. You might also want to look at the NQ for another index to trade – and I actually having been trading gold or oil more now than an index. The point is to have more than one contract to trade and pick the one that is moving the most and giving the best setups, instead of being locked into only 1 — I would suggest that regardless of the method that was being traded.

  17. Trying to turn my YM trading around. Just cannot find a strategy that works.
    Using TOS not Ninja.
    Any suggestions to get me in the right direction?
    Thanks
    Mark

    • Hi Mark,

      I would say that in all my years of trading, the renko trading method has been the clearest to teach and it has worked well. Have you looked at NinjaTrader? You can use their charting program for free [plus the cost of data]. And you could still do your trading in TOS if that is what you would choose to do.

Comments are closed.