Introduction:
A renko chart is like a point & figure chart in that time is ignored and price is plotted in discrete blocks of a fixed size. The difference is that on a renko chart the blocks are not stacked on top of eachother but they are up (or down) and to the right.
P&F charts also usually allow for a reversal limit, meaning if there is a stack of up block, a new stack of down blocks will not begin unless price moves down by, say at least 2 blocks. I'm not sure if this feature is normally available in Renko charts but I decided to write a program that allows for this. Because it will stick to trends longer, I call it a "Sticky Renko chart."
Sticky Renko charts are great for looking at trends and filtering out noise. I have attached both a standard bar chart and a picture of the same data plotted as a Sticky Renko chart so you can compare and see how it reduces noise.
Instructions:
The attached zip file contains the program which is simply a Flash program you can run in the Flash Player. In the upper left corner you enter the file name of the data file you wish to plot. You can set the number of pips you want for the block size and the number of blocks you want to limit reversals (the "sticky" aspect, a setting of 1 or 0 would be like a normal renko chart). The pip scale field is to tell the program if a pip is 1/100 units or 1/10000 units. Basically set it to 100 if the data is for a currency pair that involves JPY, and set it to 10000 for all other pairs. Finally hit the green button on the right to load the data. You can also use this button to refresh the chart when you change the block size or reversal limit.
Data Files:
The program will accept data files that are CSV (comma separated value) text files. The data should only include OHLC data (open, high, low, close data in that order). There should be no extra columns before the OHLC columns and now rows that are not price data. You can use OHLC data from any time frame. There is a sample GBP/USD data file so you can see the format.
A renko chart is like a point & figure chart in that time is ignored and price is plotted in discrete blocks of a fixed size. The difference is that on a renko chart the blocks are not stacked on top of eachother but they are up (or down) and to the right.
P&F charts also usually allow for a reversal limit, meaning if there is a stack of up block, a new stack of down blocks will not begin unless price moves down by, say at least 2 blocks. I'm not sure if this feature is normally available in Renko charts but I decided to write a program that allows for this. Because it will stick to trends longer, I call it a "Sticky Renko chart."
Sticky Renko charts are great for looking at trends and filtering out noise. I have attached both a standard bar chart and a picture of the same data plotted as a Sticky Renko chart so you can compare and see how it reduces noise.
Instructions:
The attached zip file contains the program which is simply a Flash program you can run in the Flash Player. In the upper left corner you enter the file name of the data file you wish to plot. You can set the number of pips you want for the block size and the number of blocks you want to limit reversals (the "sticky" aspect, a setting of 1 or 0 would be like a normal renko chart). The pip scale field is to tell the program if a pip is 1/100 units or 1/10000 units. Basically set it to 100 if the data is for a currency pair that involves JPY, and set it to 10000 for all other pairs. Finally hit the green button on the right to load the data. You can also use this button to refresh the chart when you change the block size or reversal limit.
Data Files:
The program will accept data files that are CSV (comma separated value) text files. The data should only include OHLC data (open, high, low, close data in that order). There should be no extra columns before the OHLC columns and now rows that are not price data. You can use OHLC data from any time frame. There is a sample GBP/USD data file so you can see the format.
Attached Images
Attached File(s)
