A Renko Trading Price Can Be A Trade Filter And Trade Setup

Renko trading price identification for chart-relevant prices is integral to our trading strategies.

The importance of price in our trading method as an important trading strategy comes from its dual nature.  A Renko trading price may be a trade filter where you avoid taking a trade because of it.  But that same price can become a key component of a trade setup.

How can the same Renko trading price possibly keep a trade from being taken but then becomes a reason for taking a trade?

You are looking at a chart with Renko method trade setups at the blue circles but without the trading prices on it – can you visualize why 2 of the trade setups are not traded, but 1 of the setups is traded?

• Blue circle1 is a price extreme reverse trade setup, but no trade is taken
• Blue circle2 is a price envelope reverse trade setup, but no trade is taken
• Blue circle3 is a midline reject trade setup, and the trade is taken

Now let me add 2 more Renko method trade setups at blue circle4-5.  Although these are method setups, only 1 of them is traded.

• Blue circle4 is a price envelope reverse trade setup, but no trade is taken.
• Blue circle5 is a midline reject trade setup, and the trade is taken

Again, why is this the case?

When the Renko trading prices are added to the chart, there are 2.  In one case, the price was a filter for the trade setups, and then the same price became one of the trade setup components.

Renko Trading Price Strategies Video

This will all be discussed further in this Renko trading price strategies video. Also, look at the article and video How Price Is Used In Our Trading Method for additional trading price discussion.

Here are the price filter or price setup basics:

• Price is support or resistance and is less than 3 bricks from the trade setup entry, so the trade is avoided or what we call a price trade setup filter
• Price fails as support or resistance and breaks with slow momentum flow, and now the Renko trading price filter becomes a trade setup component and entry.
  • Note:  In our trading method, we would call this trade setup a price failure break with MEx flow [MEx is the slow momentum trading indicator]

Now let’s look at the chart with the Renko trading prices but without the trade setups marked, and then go through the chart discussing it further for the price-related trading decisions.

• The top gray price line was the high price – it was resistance when approached, but after the breakout to higher highs, it shifted to support
• The bottom gray price line was a left-side support price brought across the chart – it gained further significance when it was tested as the swing low before the reverse that led to higher highs.

The price trading strategies video will add the blue circles to the chart and discuss them further.  We will also discuss how price can be used for trading management and why a short trade was held when there was a price envelope reverse buy.

When watching the video, you will see how the same Renko trading price is used as a strategy for a trade filter and a trade setup – and how price can also be a trade management strategy.

Click the link to watch the video:  Renko Trading And Price Strategies