Our Renko day trading system didn’t originally include the price envelope reverse trade setup, because of losses that would be incurred inside of consolidation. But that setup will now be traded when it is through the breakout potential of a previous swing diagonal that is 15 ticks or greater.
Discussion of Renko price trading strategies and how price affects our trading method. Renko chart prices can be trade setup filters, but they can also be used in trade setups for the failure of support or resistance, along with the breakout of trend lines and price patterns.
Although Renko charts and candlestick charts may be similar, these 2 chart types are completely different. The Renko charts are made from bricks of fixed price movement, where the candlestick charts are bar charts made from set time frames or tick counts.
Using Renko chart trading price lines is an important part of our trading method. This is because the relevant price lines that are support or resistance tend to hold, so we use them as a trade setup filter and avoid trading into them. However, the diagonal prices from trend lines and chart patterns tend to breakout and thus make good trade setup components.