Renko Trade Setup Filters And Trading Inside Consolidation

Renko trade setup filters can keep a method trade setup from being traded.  The basis for these trade filters is to increase trading profitability.  This is done by avoiding lower odds trading conditions and the things that tend to keep the price from continuing after a trade entry and causing losses.

Although there will be times that trade setup filtering will cause a profitable trade to be missed, there are more times that a losing trade will be avoided.  The method has 3 filters for Renko trade setups:

1. Price filter
2. Momentum filter
3. Consolidation filter

These trade filters are described further in the section below.

Renko Trade Setup Filters

For instance, from the Renko chart trade setups discussion and video, you know that we have a method trade setup called a price envelope reverse.  However, before this setup is traded, it is checked against the following setup filters:

Price Envelope Reverse

• Does the trade entry have at least 3 bricks of room to a price viewed as support or resistance?
• Is the trade entry with momentum?
• Is the trade entry on a directional Renko brick [green if buy-red if sell]?

Here are the trade filters for our other Renko trade setups:

Midline Reject

• Does the trade entry have at least 3 bricks of room to a price viewed as support or resistance?
• Does the trade have momentum [MEx] flow?
• Does the trade have a momentum [Extreme] continuation hook?

Price Extreme Reverse

• Does the trade entry come after 5 or more consecutive Renko bricks, after the last price extreme reverse, or Renko trade setup?
• Does the trade entry have at least 3 bricks of room to price support or resistance?
• Is the trade entry after a momentum [MEx] extreme?

As you can see by the trade filter descriptions, we want to be sure that all of our trades have ‘room to price’ and that they are traded with momentum.

Price Consolidation Trade Filters

We have discussed the Renko trade setup filters for price and momentum to this point.  However, we also have a filter for price consolidation – do NOT trade inside of consolidation.

When you look at the chart below, you see the consolidation period marked by the vertical lines.  And inside the price consolidation, you see 5 blue circles that are Renko trade setups – but as will be discussed further in the Renko method video below, all 5 of these trades are filtered.

Click the link to watch the video:  Renko Method Trade Filters