Renko Chart Trading Strategies And Day Trade Setup Review

Using Renko chart trading strategies, can further enhance our trading method and make it more profitable.  By adding trading price resistance and support as filters, along with Renko chart trend lines and pattern setups, we can add to the effectiveness of our ‘core’ trading method and trade setups.

In this article, I want to do a trade review for the charts below, along with discussing how our Renko strategies affected the outcome and timing of the trades.  There is also a video included that talks about these strategies in greater length.

You are looking at our gold Renko trading chart.

Renko Chart Trading Strategies And Trade Review

The first question I’m going to ask you:  Why didn’t I go long on the price envelope reverse [blue circle1] but went long at the Renko brick midline reject [blue circle2]?

Well, your first thought might be because you are looking at this orange line and you are thinking that this is a Renko chart trading price line.  I agree there’s price action at this price:

  • There was a low price where the line started and then there is a break of the line to the downside, followed by a retest and reject and then we went down again
  • So the price has shift line properties, but other than being in this area, this is not a price that was left side resistance and moved across the chart

Or you may think that the gray line is a left side price that could have been the high, followed by a break out to a higher high.  Or this could have a price low that broke out to lower lows.

  • But if that’s the case for blue circle1 it would have also been the situation for blue circle2 – both potential trades would have been price filtered, because there are less than 3 Renko bricks of room to the trading price

So neither of these are the answer; what else could have been a trade setup filter?

Before I go on let me go ahead and mark the trading prices that do belong on the chart:

  • The top gray trading price line is the high from the previous day – note that the down swing to this area started from that price
  • The bottom gray trading price line hits as a double bottom, as well as being the low before the move to the high – both of these are relevant prices in the Renko day trading method

As you can see, neither of these prices would be trade filters for either of the blue circles.  To answer the trading question, let me draw another line on the chart.

Renko Chart Trend Lines

Look at the orange down trend line; this line will be clearer when you watch the Renko video discussing it further.  Using trend lines when trading goes back to our recent trading video, when we were discussing Renko chart trend lines and patterns, and the Renko chart trading strategies for diagonal support diagonal resistance.

Renko Trend Line And Chart Pattern Strategies

In this case the price envelope reverse goes directly into the trend line. You can see the reaction there and how the price reject, and a very good example of why we use Renko chart trend lines as price filters.  But then you see the trend line break2 with MEx flow [slow momentum] and the fast momentum hook.

And that is why blue circle2 is a Renko day trade, but blue circle1 is a filtered trade.  Renko chart trend lines are thus filters when tested, and then trade entries when the line fails as resistance or support.

Renko Chart Trading Patterns

Now, I want you to see one more trade setup, using Renko chart trading patterns.  This is a W pattern [you can see this in the yellow W drawn on the chart] done as a buy; there is a similar M trading pattern, which is a sell – look at the components of this pattern day trade that was done as an addon to the blue circle initial trade:

  • Yellow squares double top and double bottom
  • The double bottom is additionally important as a price reject of support
  • Slow momentum rising along with a fast momentum continuation hook
  • Enter the trade as a triple break with continuing momentum

Renko Chart Trading Strategies Video

The video will discuss the Renko chart trading strategies for using trading prices, trend lines, and chart patterns in more detail.  Additionally, the video will further review the charts above for the trades that were done and the related Renko trade management.

While discussing trade management I will answer another trading question:  After the 2 trades were done, were we able to use the trading strategy for expanding partial profit size through a diagonal?

Clink Link To Watch Video:  Renko Trading Strategies And Trade Review

 

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