Renko trading prices are support and resistance. The price action and reaction at these prices make them significant since these chart areas tend to hold and become the starting point for swing reverses.
As a result, the Renko trading method filters trades at these prices. Or until there is a Renko breakout setup, where the trading price fails as support or resistance and can lead to swing continuation.
The Renko trading method has been developed with chart reading strategies for reading price movement. There are 3 trading indicators and trade setups that the trading method uses. Note: this is a trading method and not a mechanical trading system.
The Renko trading method also uses trade filters that are designed to avoid trades that are into price support or resistance, inside of consolidation, or counter momentum. The use of trade filters differentiates a method from a system.
Using Renko brick price action in real time can allow for earlier trade entry and have the effect of slowing down the Renko chart. Compare this to waiting for a Renko entry brick to complete, which can happen very quickly.
A trade can be placed while the brick forms once the Renko setup has all its components. And then, if the brick doesn’t complete, cancel the trade.
Renko trading charts and bricks can appear too fast to trade. At times, all chart types seem too fast. But Renko charts are unique when comparing completed bricks to real-time price action before a brick is formed.
Considering a 3Renko chart and a completed red brick. This brick can begin as a green brick 5 ticks higher than the previous close or 8 bricks of price action when the red brick is formed. Regardless of how long this process may take, it can make the Renko bricks appear too fast.
Renko chart momentum trading strategies using indicators and trade setups based on momentum leading price direction and continuation. These trade setups show where momentum reverses and begins a new trading swing, along with momentum continuation on price retraces for swing addon trades.
Price and momentum extremes and divergences are then used to identify where the direction will end. These chart areas are often starting points for swing reversal trade setups
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