Trading RENKO on higher timeframes

Hello all, over the past 6 months I have rekindled my affection for RENKO charts. we filter out the noise and provide a clearer picture of what price may actually be doing.

I have come to the conclusion that as great as a RENKO chart may look, there will always be pros and cons with this charting platform.
Here is my pro and cons list:

PROS -
- Less noise that candle stick charts
- Defines support and resistance levels clearer
- Easier to find charting patterns (Channels, wedges, flags etc)
- Ability to adapt the brick size to match trading styles (smaller bricks for scalping/larger bricks for intraday)
- If setup up on a 1min TF, we can use alerts at new brick levels to monitor new patterns.
- Wicks on a brick and be a great way to spot a reversal
- Im not that educated with wave theories, but they look easy to spot on RENKO (Shown below)


As shown this this image all above points can be clearly seen, But here comes the cons.

CONS -
- Multiple bricks may be printed before the end of a 1min amount of time is finished (or any other TF)
- Can be harder to get the exact entry point when live trading due to above con.
- Price may move xx amount before returning during the chosen TF, which can wipe a SL and then print on the chart that the move didn't happen (rendering backtesting a lot more profitable that live trading)
- Candles sticks chart highs and lows may be a lot further above or below the peaks of a RENKO chart.

(Examples of unprinted bricks during a selected TF, and a backtested vs live trade position)

The main cons to take away are primarily timeframe issues, and how the chart isn't what it seems when you backtest RENKO. you may see some really good entries and exits but the reality can be far away from it.

We could always move into the 5 second chart, but its just as noisy as a 1min candle stick chart and renders the simplicity of RENKO useless IMO.

So after trial and error with scalping RENKO charts, some profitable days and a lot of BE or slight losses. That career path is not for me. its too time consuming and stressful. (We have been in lockdown and work has dried up so I had the time to try scalping. Now everything is retuning to a slightly normal state and my main job is re-starting, I have to adapt back to less positions and monitoring the screen)

Here comes my solution!

I was looking into how we could use a longer TF with RENKO and what the outcomes would be.
Keep the smaller brick sizes but chuck them into a 1H chart. The results are interesting
The chart was showing incredibly clear movement from trend lines. Almost like the hard work has been done for you. The only problem is that when looking at the same period on a 1H candle chart we can see the cons of RENKO on a higher TF.
We can see how price actually move around a lot more than the RENKO chart has shown.

This gave me the idea to flip the scenario around, draw my trend lines, support & resistance on a candlestick chart and use the RENKO to gauge how the movement will play out. This will allow me to hold onto the larger trends without the candle charts making me feel like I should pull out early, missing the larger moves.

Now we get a better view of where to set my orders and when to pull out of them. The RENKO chart is showing the major moves whilst the 1H candle charts has been used to plot my lines. It may not look that nice on the RENKO chart but I now have a stronger vision of what price is doing while knowing where the real support and resistance is coming from.

Here is my current live positions from today. Close one short will a small loss and went long on a resistance cross.
I could hold for multiple days but my plan is to find one or two big moves a day and close them around and hour before the market closes (21:00GMT+1).
Set up some new lines the next morning or or end of the day, set my orders and let the rest play out.


Thank you for reading this if you have, this is my 1st thread.
I'm Always accept feedback to improve my methods.

Why you keep talking about "renko timeframe" ?? Renko its pure price and doesnt have time in the middle!! if you are using those charts where its "1 hour close" on renko then let me tell you that you are going to crash and burn forever



Here its your list of "cons" let me explain them:

Renko prints to fast? use a bigger brick size

See above

This confirms that you are trying to use an arbitrary "timeframe" for the renko calculation (trying to use the "close" of that timeframe in order to fit renko in it)
RENKO its pure price if in the calculation there its another kind of variable, be it ATR, arbitrary timeframe close, etc then you get a flawed chart with unreliable data and you will lose everytime... Period.. no if/buts, nothing.. its is just the way it is

Dont feel bad about it, its a common mistake when using those charts, the trader see "oh it looks pretty and accurate!! thats it, im set!"

This its literally impossible, Either the renko generator its flawed or again... Read the post above

Renko charts are super accurate and easy to trade if you really know how to read price, once you acquire this skills, the chart speak to you clearly and tells you what its going to do next.. dont over complicate it.. Simplicity and accuracy its the strength you get with them, dont dilute it

You need a reliable chart before anything, Fix those flaws first and then you can move on

Havo, you seem to know your renko. My problem with renko has always been the complete loss of time (and thus momentum) when looking at a renko chart. A brick (regardless of its size) can represent a millisecond or a week. Please give me your thoughts on this. How does knowing how to read price help this problem? Momentum is everything in trading, and you simply loose it with renko.

I understand your point about renko not being time dependant.

I'm not using an EA for MT4 that paints renko like that. The renko platform i'm using is based of time as shown. Maybe thats where i'm going wrong with it?

But what i'm trying to achieve is a better image of how price has been moving to go along side of a candlestick chart.
As explained i'm technically trading off the candles but using a smoothed out version of renko to see the bigger picture.
The candle chart is what stops me from the 'crash and burn'

Enter a breakout, look for a smoothed out peak on 1H renko. check back to candle chart and positions SL below candle low/high.

I am noticing that you may see a choppy period with the candles which may mean that a trader would pull out for price to then move in correct direction. but the 1H renko will not print all of that due to it being used with a timeframe and not conventional renko as you mentioned.

I appreciate your feedback and will DL a ea for MT4.

Im not doubting your knowledge of renko. But this explains my methods better than i can https://renkotraders.com/renko-tradi...-renko-charts/

sorry going on my above comment, maybe using a 1H line chart instead of a smoother Renko chart would achieve the results I’m after

There are quite a few ways to skin the Renko cat. For those who don't like Renko charts you might want to try this and take a look at this video.

Well, actually its simple but its a bit different from time based charts

First, be carefull with the "complete loss of time (and thus momentum)" concept, if you need to watch the price moving in order to place a trade you can end being one of those traders that "chase" the price and that can bite you in your ass more times than you want.. If you are not one of those then disregard this message

Second.. Yes, watching how a renko charts works can be weird sometimes, because it can looks as a "stalled" and make you look at the router if its working or not (lol) BUT dont think for a second that you are missing the "momentum" thing you are looking for; as a trader you must need to react to market conditions and never chase the price.. If you do this you are already risking getting stopped out by the natural up/down moves of the market

"oh ok.. but wth can you do that?" you may ask? easy.. renko its pure price and have 4 quadrants (OHLC) IF you learn how to read that individually and then in group of candles you can easily tell when the market its about to turn around or keep moving in 1 direction and react to that before the move begins and not later


Its like learning a new language: sure its weird and doesn't make sense at the beginning but once you get it the chart literally speaks to you.. you just need to wait and listen =)

Now that you have confirmed it for sure it is, dont doubt it for a second !!

Since the renko charts you are using now are flawed, the "time charts" are the one thats saving your ass everytime.. Full circle coming around with bad results everytime

I read that article a long time ago when i was a noobie with renko charts and was reading everything i come across in front of me hehe, and i can tell you right now with 100% certainty that its 100% completely wrong information.. carefull with that

Why??

Because like i said a few times, renko its "pure price" with no time in the middle.. that article mentions that the "smaller" data its a tick wich its right BUT from there it says that the smaller size available in mt4 its 1 minute and thats where the problems start.. a GOOD generator only gets the incoming tick data and ignores the chosen "Time" by the users, thats why a robust and properly build renko generator dont repaint a chart even if you change the base "timeframes" close/open the mt4 or whatever you want to do it just doesn't care at all because the incoming tick data to calculate the pips to display the bricks you want are and will be always the same

Same as "Renko bricks based on ATR" on paper a good idea.. in practice?? horrible, you are gona get shafted/crash and burn every time and not worth it =)

Nice one.. that indicator would be awesome IF the renko "bricks" could show more info; it will kick some serious ass that way!!

The advantage of this strategy is that you don't have to wait for a brick to form completely before initiating a trade (trade initiated on the opening of the first Renko V1 bar) as it's the case with normal Renko strategies (trade initiated on the opening of the second Renko brick). By doing this you can normally get a few more pips in your favor. Of course the trade could go the other way but you would suffer only a few pips loss. Another advantage is that you can try to get a more advantageous entry. The best way to do that is to enter into a trade in the middle of a Renko V1 bars or better. Best is to change to a line chart as shown in the example below. You can also change timeframes easily without changing the Renko brick size to see different trade possibilities.

Hey Hutch This is a great variant of our favorite Renko plugin, is it available in MT5?

I'd like to try it out on an MT5 platform, thanks.

I sent you a pm about it

People trading renko this way: first they set brick size, for example 100 points. Then wait for 2 bricks same color in a row and enter the trade.
But i'm a little bit curious why not to set buy/sell stop at 200 points? This is the same gambling method.
So for me Hutch approach is much better. You see candles, you see let's say time. And bricks. Bricks are like zones, but you see price movements, volumes, etc. Blank renko makes you blind. May be I'm wrong.