When Renko system trade setup trading we use a combination of multiple setup components instead of single components like an indicator or pattern break trigger only. By requiring multiple component trade setup confirmation, we are able to avoid many low odds for profit trading conditions.
The Renko system trades setups will be taken from our Renko method with the exception of the price envelope reverse because it would not be profitable day trading without filtering. The 2 setups that will be mechanically system traded will be the midline reject and price extreme reverse and they will use the ‘base’ method setup components.
Trading Renko chart selective trade setups, instead of Renko base method setups, will help ensure that momentum is leading price during trading periods that may be moving into consolidation.
Understanding Renko charts and trading them starts with making Renko bricks. It is important to know how new bricks complete in either direction, especially if your charting program shows an overlap between a completed brick and an uncompleted counter brick.
The Renko chart momentum hook is an important trading strategy as it indicates price continuation, making it a component in trade addon setups. Considering trade addons typically are at later prices than the initial entry, we want this hook indication that momentum isn’t ending.
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