Renko Chart Trading Method Basics And Strategies

Renko Trading Method Charts

The Renko chart trading method uses charts that have bricks of a fixed size.  A Renko chart brick does not use a time frame or trade volume.  You are looking at a 3 Renko chart, meaning that each closed brick shows three ticks of price.

Regardless of now trading with Renko charts, these trading method basics are those used since 1995.  At that time, I was option and position trading using time-frame charts.  In 1997-1998, when I started with futures day trading, I switched to trading with tick volume charts.

It was 2011 when I started working with Renko charts.  I liked the visual symmetry of these charts and the use of price as the primary focus and started developing the Renko chart trading method.  I saw additional clarity with the method trading indicators and trade setups with my premise for price movement – and switched to Renko charts for futures day trading.

Renko Trading Charts

You are looking at 2 Renko charts with our trading method indicators.  The left side is a classic three brick Renko chart, where the right side is a custom Renko chart that shows price tails.

Our Renko trading method uses NinjaTrader classic charts.  Using these charts is a function of the Renko brick size and the amount of price information potentially not seen. However, a missed trading price could become more significant with bigger brick sizes and position trading.  This has not been a day trading issue with 3-5 brick classic charts.

Renko Classic Brick Chart Compared To Price Tails

Renko Trading Basics

Momentum Leads Price

Here is a list of the basic premises that the Renko chart trading method uses:

  • Momentum leads to the price continuation, which continues until the price reaches a resistance or support point.
  • Additionally, since the price leads momentum, an extreme or divergence stops the price continuation.
  • Momentum extremes and divergences lead to price reversing its direction or moving inside of a relatively tight trading range that becomes untradeable.

Renko Chart Trading Method Basics

Renko Trade Setups

Consistent with these basics, the Renko chart trading method uses trading indicators and trade setups for entering a trade when momentum reverses to positive or negative.  Our most basic trade setup, which is a price envelope reverse, a buy will occur when the Renko price envelope shifts from red dots on the top to green dots on the bottom.  This envelope dot shift is also the point where momentum goes from negative to positive.

As momentum continues and leads the price swing, we look for Renko add-on trade setups.  These will give a larger trade size for the larger trading swings.  A trading swing and the price continuation can reverse or consolidate at momentum extremes. The Renko method uses this chart-read for trade management or trading direction reversal.

Renko Trade Filters

The use of trade setup filters regardless of the trading method is an essential component for increased profitability.  Our Renko chart trading method filters’ objectives are to avoid trading setups with lower odds.

For instance, consider the following trade filters and trades that a trader would avoid:

  • Entering a trade at support or resistance
  • Buying a red brick or selling a green brick
  • Trading against momentum extremes or divergences
  • Trading inside of consolidation

There are times when a Renko trading setup occurs with lower odds than intended.  By using the trading setup filters, there are more losing trades avoided than winning trades missed.

Renko Trading Method Overview Videos

You can watch the following video for a further overview of Renko chart trading, discussing the following:

  • Renko trading method ‘base’ premise – momentum leads price.
  • Renko charts and how the bricks are made, including differences between a Renko classic chart and a Renko chart with price tails
  • Renko method trades showing the trade setups and trading indicators
  • Renko method trades setups that are filtered

Renko Trading And Strategies Video

Renko Chart Trading Video Discussion

Continuing with an overview of the Renko trading method basics, we will now discuss the following chart and outline:

  • Renko trading indicators and their momentum component.
  • Renko trade setups and their multiple components vs. indicator only trading.
  • Renko trade management including initial profit and loss, trailing profits, and price-momentum considerations.
  • Renko trade filters, further discussing method trade setups with lower odds.

Real Time Renko Trading

Note:  if this were an actual Renko trading group video, it would not be pre-marked like the chart above.  Instead, the video would go through it one Renko brick at a time to better simulate real-time trading.

Renko Chart Method Trading Video

Renko Trading Group Videos

The following links are for Renko trading group videos.  Watching these will give you a better understanding of the content and objectives for these trading videos:

  • Renko chart trade discussion, covering all aspects from the ‘base’ method setups and trade entry through trade management and trade exit or reverse.
  • Further discussion, especially for any trade filters or chart difficulties that may have occurred.  Although these are part of the Renko trading method, they would be important considerations for any trading method.

Trading Group Video1

Trading Group Video2

Trading Group Video3

Renko Chart Trading Group

Enjoy these videos, along with the rest of the articles and videos in the Renko Chart Trading Strategies Website; I will be continually adding new content.

Renko Chart Trading

My objectives for the Renko Chart Trading Group are to provide a futures day trading method using Renko charts.  Training will be done using Renko trading videos; there are typically 2 new videos each week.

The Renko method videos will include the following:

  • All aspects of the Renko trading method from trade setups through trade management.
  • Progressing from paper trading to real money trading.
  • Method trading and system trading differences – we are not trading a mechanical trading system.
  • Using trade filters for avoiding certain Renko trade setups with reduced odds.

The Renko trading group is $55/month.  As a member, you will have access to all of the member training content.  Additionally, you will receive my Renko trading indicators – these have been coded for NinjaTrader.

If you have any questions or would like more information, email me at RCT@earthlink.net

Join the Renko Chart Trading Group

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32 Comments

  1. 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

  2. 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

  3. 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

  4. 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

  5. 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.

  6. 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.

  7. 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.

  8. 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.

  9. 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.

  10. 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

  11. 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.

  12. 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.

  13. 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.

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