Renko Trading Price – The Same Price Can Be A Trade Filter And Trade Setup

Renko trading price identification for chart relevant prices are an integral part of our trading strategies.

The importance of price in our trading method as an important trading strategy, comes from its dual nature.  What I mean by that is a Renko trading price may be a trade filter, where you avoid taking a trade because of it.  But then that same price can end up being a key component to a trade setup.

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

You are looking at 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?

Renko Trading Price Trade Filter And Trade Setup

  • 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 actually traded.

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

  • 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?

You will see when the Renko trading prices are added to the chart, there are 2 of them.  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, but also take a look at the article and video at 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 – it us resistance when it is approached, but after the breakout to higher highs it shifts to support
  • The bottom gray price line was a left side support price that was brought across the chart – it gained further significance, when it was tested as the swing low, before the reverse that led to higher highs

Renko Chart With Trading Prices

The price trading strategies video will add the blue circles back to the chart and discuss them further.  Additionally, we will also discuss how price can be used for trading management, and why a short trade was actually 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 link to watch video:  Renko Trading And Price Strategies

 

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