Renkology

Yes so I realised when I read the whole thread. Indicator seemed to work better on normal time frame charts than renko, but I have ZZ based systems that work on renko. Anyway don't want to go too deeply into this as not part of Wab's thinking as yet.

Its a visual alert of the PA. Not needed at all to trade. As I said I only use it to better visualization of the subwaves during the movement

Thanks ghbdr, I will have a look at it. You never know when a piece of the puzzle presents itself and finds a nice, aha moment, fit.

Some things work nicely on time based charts that don't work on Renko charts because of how they are calculated.

Our brains are still the best indicator but suffer from a lot of noise,

Talking of brains, mine is trying the decide what is best to do next. (Sometimes it is like a bucket of frogs hopping around.)

I will come back to strategies for multiple brick entries. Essential stuff for E S major trades.
I also want to talk about Fibs (a lot) and longer term trades.

Instead of any of those, at this point I think it makes sense to explore the relationship between Renko and Trader Vic's 2B pattern and SETUP.
Might as well throw a bit of Elliott Wave in there too. If that all sounds intimidating, you are already well along the learning curve if you have come this far.
It's all the same thing really. What you see depends on where you stand and what you have learned from other sources.

The Renko 2B is found at the Gong signal.



Study the time based 2B pattern and look at any Gong signal on a Renko Chart. The opposing Wick is the top bar of a 2B.

2B strategy can be applied to our Renko Charts. In fact you may be doing that already and have no idea that is what you are actually doing.

I'll look for a few examples and we'll get started.

Check the two charts here, The one on the left is a 1 pip Renko and the one on the right is a 5 pip Renko.

The 1 pip chart reveals a classic SETUP reversal. The same reversal is hidden away inside the 5 pip Renko chart. We can recognize it thought by examining the pattern that occurs again and again, every time we get an opposing wick and its Gong alert.




Note how I exited my trade right on the 2B E line, also the place where a 2B entry in the opposite direction on the 5 pip chart would be perfect.
I don't always get a perfect entry/exit like, that but using a higher brick frame (HBF) and a lower brick frame (LBF) in conjunction like this is very powerful.

(I love it when trading actually gives me such a teachable moment.)

Trade the HBF with signals from the LBF.

You can check this in your own charts:

Vary the LBF and HBF relationship and you will find how the LBF signals give so much information about the HBF.
Look back in the thread to where I live traded the M5 time based S E chart structure and how it related to the Renko bricks ... sort of.

Doing this with a LBF locating the potential E lines, drawing in the trend line along the E points - its even better than doing that on the accompanying time based chart, if your Renko software can handle it.

You are also freed from the M1, M5, M15, structure that MT4 forces you into. I can run Renko charts form 1 point on up. Nice.

You can also reverse the process. Go Find a HBF Gong and go look for the corresponding LBF SETUP.

With the older offline charts software, this was a difficult, even impossible, process. With Ova's Omnia Remote it is a lot easier to do.

You may find that you already knew this 2B Renko pattern on some level and this is just a detailed explanation.
We often do things without quite knowing why they work.

I find more confidence in understanding what is actually there, or at least what I think is actually there.

So 2B, Opposing wick, Gong, SETUP, all roads lead to Rome.

I promised a bit of Elliott Wave because it also comes into play here. We'll get to that as well.

Interesting what Wab says about doing it without really knowing it. I'm familiar with 2B anyway but this is how I see it at strategic points on the chart, for example at high or low of the day ..........



M's and W's

And here an example of a trade currently in play on DAX now ........

In relation to 2b I submit the following video to your attention.



Attachment G
It is based on volume. I have found the indicator write for tradestation and convert to MT4 based on ATR because the forex haven't volume.

In the picture above note how demand gradualy decrease and supply increase. In the video you will find also two crazy example on renko chart.

I have read Nicholas Darvis' book and studied Wyckoff a bit, but the video you posted it excellent. Forex volume is iffy at best but Weiss explanations are great.

So many time's the E line is exactly where Weiss is telling us to look for a trend change. Thank you for that input 19monza64. Great stuff.

On the other hand, I was so busy looking at Weiss stuff today I didn't get the promised Elliott Wave material done for you. Nor did i get any work done at my work jewelry bench.

Eventually I took the dog snow-shoeing as it has warmed up to a balmy 3 degrees. Hints of spring coming.

Now I have to study Weiss/Wyckoff a bit more.

I love it when something else fits in to what you are doing and adds another layer of confirmation.

All you need to know about Elliott Wave through the SETUP filter.
We look for E line breaks and it turns out they always arrive on a wave 4.

Sometimes you have two E lines because you are seeing two wave structures.

The object is to enter on the small one if you can and trade the bigger one.
We can do that on two Renko charts with different sized bricks and will get to that it due course.

Meantime , if you never really understood Elliott Wave Theory, here is how it interacts with SETUP (Wave 4) E lines.



The red E line being the potential E line you would watch for a direction change.

I didn't label one of the E lines on the chart, inside if wave 1. If you can interpret the larger structure with the bigger waves you can enter inside it.
It requires training your eye to see what is there, waves within waves. That is the whole thing that complicates Elliott Wave theory, which wave do you monitor?

When we have two different brick frame charts in a proper ratio to each other, you can see the smaller waves at work inside the bigger ones and react accordingly.
Entering on a smaller one and as the bigger one develops, using the S E structure on the bigger one.

Meantime, I am having fun integrating the Weiss material into SETUP charts - hence my delay getting this Elliott Wave summary posted.

Next , I really want to see if anyone (self included) can catch an E to S trade and post the chart here.

Some strategy, for doing that, will follow.

A little E S trade that I shut down before the markets close.



(Excuse the new template, as I am simultaneously trying to study the Weiss indicators and see which one I like.)

Using the S E structure we know that an Ebb is (usually) followed by a new Surge. So we can either take a single trade at a gong, 2B, opposing wick, where we expect an E to form. (Consulting the AO, AC and Weiss as well as any other indicator that gives you good timing entries.)
Or we can place an order to enter at each new anticipated brick forming on the way back to S.

We enter at E and trade to S as a minimum target. with a high degree of certainty.

Opening multiple contracts, like the 1, 2 and 3 levels shown, allows us to stack the orders and stops in such a way that risk to the overall position is minimized.

I closed this order because the market close is imminent, but you can enter such and order and move the stops up on each potential E line for a long, long, time.

You can also add on at the next E S and let multiple trades, all in profit already, run on and on until the potential E line shows up that finally reverses the overall trend.

Some reflections. A very dear friend of mine who is a successful full time trader always tells me: "If looking at a chart it takes you more than 1 minute to understand if you have to go long or short, change pair make things easy" Using an indi to identify the Wave is not the best. But it depends on how many pairs you trade and if you are a full time trader because it requires time and a lot of attention. I am not a full time trader and I manually trade almost exclusively EURUSD, identifying the Waves by eyes is not difficult. For those who want to trade more pairs, help can be given by a normal zig zag on MT4 which gives the structure of the chart while the zig zag fractal the micro structure.

I am a great fan of Elliott Wave. With SETUP, I have tried to find a practical, easy, way to use the EW structure that is very eye-friendly.
I also love the way Fibonacci and EW work together. We will definitely pursue that at length.

Wave T U P is the 1 2 3 of a new EW structure so we expect P, or 2, to pullback to the 61.8 to 78.6 Fib level. All good useful stuff to know.
With opposing wicks and other Renko clues we try to plan our entries at whichever level the cahrt decides on. We never know but we can react.
Agreed on that for sure.

One problem with Renko is that we cannot see the internal waves at times unless we use a smaller brick frame.

I will post an objective Elliott Wave chart for the EURUSD each weekend, so that we may have it as a guide for the following week.
Any thoughts on the most useful time frame? Let me know.

I have been studying the Weiss material and find it very interesting. It does make me think that my interest in the length of time it takes for
a Renko Brick to form is an important bit of information. I know Renko is supposed to be time independent, but it really isn't. Some bricks take ages to form and others, the same amount of price movement, form in seconds. That has to be useful information. Tipu Renko, on the time based charts really shows that up.

When we ignore information, just because it has always been ignored, we leave an unpolished facet on the gemstone.

As I keep saying, there is a lot of information to work with here and we are just getting started. I am learning more by trying to facilitate and thank everyone for that.

Here is a daily EURUSD ElWave chart, zoomed in to the part we are presently interested in.

I agree with you. Timeless aspect of renko charts its an interesting field. Defenitly speed of brick is something to atend. In my charts I use the measure of one slow stoch (34 3 3) vs a fast one (8 3 3). When they have confluence, a phenomenon called the rope always indicates strong momentum, aceleration and fast brick creation. They are the safest entries with very little DD.

Another almost 100% winner scenario its the elasticity setup where the fast stochs creates elasticity trying to force the slow one to move but fails and slow stoch keeps firmly inside the OB/OS territory. Here most of the time you can observe aceleration during the snap back of the fast slow coming back to confluence with the slow one.

Both are strong trend safe setups supported by the aceleration of price movement.

In fact they are the same setup. You trade the snapback and Ride the trend during the rope event after elasticity

One can see some very good divergence trades off the MACD too.

Of course. Divergence setups are good ones. I trade that kind of setup. I call it elastic divergence. Disagreement between the two oscilators with elasticity on stochs. Hidden divergence comtinuation type supported by elasticity and eline breaks. I dont trade clasic div as I see it as an early warning of trend change. I prefer to trade the continuation div after the early warning of the clasic div and trendline/eline break. The second trade is very good. Break of eline and then two test of the break. The second one upthrust before the down movement+elastic div