Renko Trading Discussion

Oh well, BE+2!

You're welcome. To tell you the truth, I have not dealt much with this indicator yet given that I have found it this week end it seems to have potential. It is even clearer with regular timebased charts with fast EMA 5 and slow EMA 21 because a big breakout is clearly visible. On my picture, you can see sideways market conditions spotted by this indicator and then trending markets. So on Renko charts I would use Fast EMA 5, Slow EMA 8. Actually, this indicator seems to be Keltner channel based! The one I posted will display the section of the Keltner channel in which the fast EMA is between upper and lower limits of the channel.
I am sorry, I have not yet found any strategy that suits me so far. So a possible philosophy of this strategy could be as follows :
Entry rule :
At the open of the very brick the channel is broken : Buy if uptrend, Sell if downtrend. YOU SHALL NEVER OPEN A TRADE AS LONG AS THE CHANNEL IS DISPLAYED! It may be more cautious to wait for a new section of channel to be displayed as I mentioned it on the attached picture. If you feel you prefer to go on, you can reenter a bounce (2 consecutive double sized complementary bricks 1 bearish, 1 bullish).
Exit rule :
A prudent way to proceed should be if you trade 1 lot on a clear signal, so whenever your market is trending, you can cash in 0.6 to 0.8 lots after one complete brick size, and trail your stop all the way for the 0.2 to 0.4 lots left... For example, you will have a S/L of 2 bricks difference from Entry price and every new candle you create, you will move your stop one brick. So, you will mainly experience 4 situations :
1) The market will evolve against your bet : you will lose the whole 2 bricks size of your trade : dammit!
2) The price will go the right way for one brick and reverse then : in the case you have chosen 0.6 - 0.4, you will win 0.6 lots of your first brick and you will lose 0.4 on your Stop which yields 0.6-0.4 = 0.2 lots... Not too bad (but it depends on which proportions you choose for your 2 parts trade : if you chose 0.8 and 0.2 you would have made 0.6 lots)!
3) The price will go the right way for 2 bricks and reverse : the 0.6 to 0.8 first part of the trade is already cashed in, the remaining 0.2 to 0.4 part goes in break even so you will cash in 0.6 to 0.8 lots.
4) The price goes the right way for, I don't know, n bricks : you will then make 0.6 to 0.8 lots for your first brick and then make n-2 bricks size times 0.2 to 0.4, which on ten bricks could offer you 0.6 + 8*0.4 = 3.8 bricks or 0.8 + 8*0.2 = 2.4 bricks. So in most cases you will win even poorly but will be safe quite soon. It is up to you to choose your proportions. If you deem you prefer an aggressive approach, you can even choose 50-50 which will give you a break even as soon as you win your first candle but you will earn much more for every single brick you will have. You can be very very aggressive and choose to prefer less than 50% of the volume of your trade on the first brick and the rest on the rest of the trend. It all depends on the way you trade and the money you accept to potentially lose. You can even prefer to cash your first part of your trade not on the first candle in the right direction but on the second which is also more aggressive and means that you are more likely to lose if you barely make the first brick but not the second one. Or 50% on the first brick, 25% on the second and the remaining 25% at the reversal (n-2 bricks of the trend) = 0.5*1 + 0.25*2 + 0.25*(n-2) = 1 + (n-2)/4 brick size.
You can try to see what is the best formula for you by creating your own excel chart.
Disclaimer : This strategy has not yet be tested. It is very strongly recommended for you to test it before on a DEMO ACCOUNT and then if you feel it right for you, you can use it at your discretion. I cannot be held responsible of profits or losses you should make.

Hi, FXgenial.
Thanks for the detailed explanation. I look forward to your follow-up.
Bestregards.

hello math trader! i am very inspired from your projects and for your automate a simple renko strategy i want to put down my 2 cents if its okay with you. Is it possible to add a loss recovery function it will not be like lot multiplier but something different . let me give u an example-

lets say i have 1000 usd balance and going to trade for 10 pips in eurusd with .03 lots. Now if it hits 10 pip sl or any other sl which is defined by EA the loss will be 3 usd now in the next trade only on eur usd loss recovery function will be activated and it will take consider the previous 3 usd loss and new 10 pips target with 0.03 lots that means from my 2nd trade ea will calculate lot size based on pips required for TP 0.06. again if eur usd hits my SL it will do the same thing and consider previous loss of 3usd+6usd = 9 usd and take consider of new 10 pips for TP at now the lot size will become 9usd+new 3usd target = gives me lot size of 0.12.

just my little MM budoo idea.. hahah let me know please what u think about that.

stay safe guys!

Hello traders,

Does someone have any idea of the money management that we can apply on Renko strategies? I mean, on Timebased strategies, we can face big glitches every now and then, for which a S/L and a volume of trade has to be defined at the opening of the trade and 2% is a generally accepted value. Now, on Renko charts, there are no glitches (I mean, candlesticks with massive bodies and wicks compared to others) at all, so, is 2% of our balance a valid requirement or can it be reeavaluated to higher %?

Thanks you

Is there an automated Renko EA here that is trading "Profitably"? Thanks to all, Especially you Math!

Hi Renko (and non) traders,

Here I share in case it should be useful an indicator I made. It is a trailing indicator as well as moving averages. Nevertheless, the calculation is a bit different. Moving averages, most of all exponential and Hull MA display bounces in range conditions. It is not comfy if the range dwells a lot. It does not repaint and I put no alert on it for the moment.
Below is a picture in which you can see the difference between an HMA and this Renko trailing indicator.

Sorry MathTrader7 for the artefacts on the chart but I used the hst files you posted on this thread. :/

Feel free to test it.

DAX +22, closed at the red line:

DAX - see if this makes the 665 resistance, 5 pip bricks:

DAX +10 locked

DAX +14, moved the SL to a fairly tight position, didn't quite make 12665 level and stopped out:

Nice shots Davidh061,

Would you please describe how you do to place your support and resistance levels?

Cheers

Hi Fxgenial,

I look out for the reversal bricks that are created by MT7's EA and way up what I think is likely to become an S/R zone. If you look at the last chart there was obvious activity around the 12665 level and a couple of reversal bricks bouncing off it. The strong, clean move short is a good opportunity for a retrace trade because there is little/no "noise" in the short move to interfere with the retrace. There was another opportunity to have a go at the 12665 level from a sequence of higher lows squeezing the market gainst that level, I might have expected it to break though the 12665 level towards 12700, which it did!

Sorry, meant to add this chart in the last post! Cheers, Dave

I should also have said I didn't take the trade long from 12640 - asleep at the wheel! Cheers, Dave

Ah alright. I am not good at it. I mean, I could find S and Rs and you could find other ones... It seems pretty blur and personal. I prefer indicators to horizontal and inclined lines. On your very last post, I find 12590, 12595, 12605, 12610, 12625, 12635, 12645, 12660-12670, 12690-12695, 12675-12680... But they are too many, so it becomes pointless.

Hi Fxgenial, there are some stronger indications of an S/R levels than others, in this case the 12665 level/zone was reacted to quite strongly twice, the first time I took a short trade, the market returned to that level and bounced off it again, presenting a long trade opportunity in a nice clean short retrace and a higher low which I took. Because I don't show the wicks on my bricks, it doesn't show how close my trade got to 12665 level before forming the tight range and reversing. Not quite enough pips to complete the final brick at 12665 which would have been a +25 trade rather than the +14 I actually took. The third opportunity burst through the 12665 level which wasn't surprising because the way the market was being squeezed by the higher lows. I agree it can look a bit of a blur, but with practice you begin to recognise the significant S&R zones.

I think the key thing is to look for "clean" areas where the market is moving with very few spikes in the trend. If you can find nice clean swings it can make the S&R zones more obvious. This can be difficult in some currency pairs, but these long moves with very little noise occur frequently on the DAX, which is why I like trading it!

Cheers, Dave

You like trading DAX? On my side I have seen that GOLD (XAUUSD) can generate tens of pips a day... For example today (09/07/2020) it was a discrete 60pips downtrend. The day before, it was a good 140 pips uptrend... and I am only talking in pips between Open and Close, if you consider between High and Low, you will have the bit of fun (200pips today, 270 yesterday)! It seems that the best strategy for Gold is to swing trade it or even longterm trade it. You put a nice 0.05 lots on it at the beginning of a trend, and you wait days and days until you have a reversal! Putting big volumes on Gold can be very risky if the trend reverses... For example if you open a long of 1 lot @1800 and close it @ 1801 you make 100$. On the other hand, to make 100$ with DAX, it seems that with the very same volume, you have to pick up 100 for example 12500 to 12600!

You've got to be very intuitive on this and it is not my case. I find indicators clearer than S/R with respect to their "universality"... It's easier for you to illustrate a strategy to another trader asking him to place, an EMA,34,Close on a H1 chart than asking him to place supports and resistances on a H1 chart...
Now I am looking at your DAX Ger30 index, and it seems that in Daily, your price action is building up and sliding above the EMA34,High as a Support.

Cheers, Will

Hi Will, I have traded a range of instruments in the past but not metals! I do like trading GER30 because of its volatility, it can be a bit wild at times, but it usually delivers two or three opportunities a day that I can trade and generally it seems to work well with Renko charts. Some instruments don't work so well and require a different style of trading.

I did have a look at gold a while ago, but didn't do anything with it, I will take another look in my demo account. I agree that using an indicator can help explain what the market is doing, I have nothing against indicators! Personally I just find it more intuitive to trade without them than with them when using Renko, particularly this non gap style of chart. There are a number of threads on FF trading time based charts without any indicators which I have also tried but with limited success, maybe I didn't spend long enough to "own them". Cheers, Dave

Hi all,

Regarding Renko generators, I was wondering why a same pair with the same timeframe and the same brick size can have different aspects : broker platform VS MT4...

Someone has an idea? I would really love to trade the upper renko chart on MT4 with all my indicators and stuff...

Cheers