Animal Farm (Renko system)

To Hyperfire and Peterrs:
Read and read again. It is one of the shortest threads on ff yet one of the heaviest in content (in positive sense).
When it sinks in you it IS KISS. But give yourself a chance and read it slowly and ‎thoroughly.

Hello everyone,

Thank you Krystyn, how i already says i'm gonna to read all thread again many time needed, but i was just curios to know if Wab and other memember like you still consider this a KISS system or not that's all.

hi Hyperfire

i was trading stocks from 1998 up to 2008 and from 2008 up to now i am trading forex. forex sucessful from about 2012. i tried a lot of systems and indis belief me. the most were useless. for me priceaction trading works best, like this one here. my system is much more complicated and i will bring some parts of wab´s system into my system to get more profitable.
we must find a system that suits our personality and if we find it we have to stuck to this system until we are perfect. than we can add another system and so on. so i did. but not at the beginning. i was jumping from one system to the other like a bunny.
if you find a system that brings constant winnings with an arrow up for by and one down for sell, please tell us. but i am afraid such a system doesn´t exist. for constant winnings you need your brain because the big boys are very smart and we fight against them. they call us the dump money. you know why? i bet you know.

wab´s system is in my opinion not very complicated. especially if we get use to it. like every sytem we have to train it and when we know it than its easy. I am trading renko, a other system, but i am learning every day someting new and i would not stop learning. if we stop learning the smart boys takes our money.
this here is in my opinon a advanced system, but not a complicated, if you learned it, it brings you a lot forward. if i found it earlier when i was a beginner, this would saved me a lot of timewasting to try useless systems from this or that guru.

so thank you a lot, wab and all others wich makes konstruktiv work in here and sorry for my bad english.

Hey Wab you have a great forum and an easy to follow way of explanation
I love fractals and am actually learning from your post
although I do not actually trade with them yet but am looking to jump in soon
also great post by Monorco and others
good wishes and regards from Oz,

Hello everyone and sorry for the late reply.

Thank you Eurix for sharing your opinion, i can understand everything you said without problem, of course i can agreed with you.
I just asking an opinion, and in your words we can find why i have ask it; because there is a lot of system and how you already says is very strange to find a suitable strategy for every of us.
I start to read the post and everything look brilliant, after some time i get a lot of confusion because many other indicator was added, and after some time the post was rebooted and everything change again, well yeah i know this is the FOREX, yes we need to be smart and move arround this jungle or we can be eaten from big boys, but the chaos dosen't help, that's why i ask if any of you an opinion.
I hope my words are not misunderstood, i not says " hey the Wab system is horrible or it dosen't work " i just ask an opinion that's all.

P.s The system with arrow up for buy and arrow down for a sell, wow that's can be impressive and awesome, by the way big boy dosen't let us to use it, because they do the best for ruin our trade record !

I appreciate your post so much.

Thank's to you and everyone.
Have nice day.

H.

Hi Hyperfire and everybody else,

Here's my own comments on this discussion point:

I found whats lacking in my own trading is an understanding and reading of the bigger picture of what is happening in the market. In other words, sometimes the exact same setup will work in one instance but fail in another. Now I know part of the reason for that is purely due to the randomness of the market. But I also know from monitoring better traders than myself, that they have the ability to be more selective in picking their trades. And I think the difference is that they have a better feel for the overall direction and sentiment in the market. The bigger picture as I will call it.

Whats Wab is doing here is he is giving me tools (HH,HL,LL,LH and E-line, when the trend direction change etc) to enhance my own ability to evaluate my own setups within the context of the bigger picture. And Wab has the ability to explain things like Elliot Wave concept, overall market direction, which always has been a bit of a mystery to me, in a way that I can not only understand it but as also apply it to my own trading.

And yes, I agree it takes a few reads and also some application/ exercise to fully understand. And it may be a bit advanced, but I am of the opinion that every trader need some of this "bigger picture" knowledge to be really successful in trading

When I trade I have an indicator that changes the background color. It is more for auto trading, enabling me to tell at a glance which direction my robot has taken a trade. I will discontinue its use here, as we do not need it.

I will also just stick with only the 8 shift 5, smoothed median moving average (the red line in the Alligator), fractals and the AO. The main indicator is always going to be price, with the HH HL LL LH analysis revealing a potential E line. The current trend line that works with the BW fractal or the E line to form a BW Fork. Usually this matches with divergence on the AO.

I realize that I have referred to other indicators:

The MACD 5 34 5 which is nearly identical to the AO.
De Mark lines, which you can basically determine yourself without the messy indicator cluttering up the chart.
The Alligator, from which we only use the red Teeth line from. (8 shift 5, smoothed, median moving average.)

I will keep charts white with only the AO, fractals and the Teeth moving average. I will be adding Fibonacci extension and retracement lines and explaining a lot more about those in due course.
Trend lines are also essential in illustrating the E line, the BW hook and figure four trades.

In the next chart, I have shown the last trade that I took before I was out of town. I closed it off at the 61.8% level because I could not be there to manage it.
As you can see it would have easily made the 100.00% level. As we go along I will show you how to get the best out of a trade like that, instead of a mere 61.8%

The chart shows divergence on the AO, a BW Fork and A Fib retracement. I also have the HH HL LL LH analysis as it was at the time.

So here is some homework:



Continue the HH HL LL LH analysis and determine the next two trend reversals with BW Fork analysis.
Check the AO carefully as you go for any divergence.

By the way, the two moving average lines on the AO are a dodger blue 1 SMA and a black 5 EMA of the AO. You can add those if you like, but they are not essential.

Do not worry about posting any solutions, I will do that and you can compare your efforts with mine. Please do the analysis before you look at the answers.

Answers:

Make sure you have tried to find the HH HL LL LH trend reversals and BW Forks in the previous chart before you go further.

Scroll down.

Answers are below.

I hope that I have managed to answer most of the questions asked so far. I did not really refer to the HBF chart a lot, but I will get back to that.

For now, I want to concentrate on the HH HL LL LH trend reversals and how to trade them. Eventually, I will combine the 10 pip bricks and the 30 pip bricks on one chart and provide a nice audio alert in the process.

I have attached a template for the 10 pip Renko chart that should keep it simple, as requested by one or two people.

Meanwhile, don't forget the Figure Four Trades.

Here are some that were available and the one that I am currently in.

I colored the potential trades A, B, C, and D and left the current one (E) in black.
I didn't take any of the earlier ones as I was traveling. I also entered this one late
but I figured it is good for some pips as it broke belwo the last fractal.

So far, it is on its way to the Reward level, up 47 pips with 22 locked in.

Trade closed at the Reward Level.



The diagonal line of each Four can be drawn from fractal to opposing fractal, wick to opposing fractal or occasionally from wick to wick.
Renko Bricks are great for this.

The trade I just took was taken late, I like to enter at the midpoint of the Four Diagonal fifty percent level on the Fib Expansion Tool as
shown. However, a late entry can still be taken with confidence, as you have a good idea where themarket will go and can decide accordingly.

I could also have gone for the extension target but I had to leave the trade to its own devices as I was busy doing other things. Being able
to place a pending order and a predefined stop and stop loss are great when you have more things to do than just trade.

When I cover the trailing stop opportunities in this type of trading you will see that there are ways to handle those situations, but we
will continue to take little steps and master each before we move on. A trailing stop on the Teeth line would be very good here but I
will leave that until later. I will come back and talk about that as this chart develops.

You will have noticed that I do live trades here. If your teacher does not show you live trades and the rational behind them as
they develop... move on. Hind-sight is easy. Doing it in real time is what separates the nuggets from the gravel.

Hi Wab
First thank you for the post and all the time you put into learning us this forex trading methode.
english is not my native language so it takes some time to understand and slowly slowly it becomes clear.

I have a small question about the entry of a trade when a "four signal" is formed.
You say: "I like to enter at the midpoint of the Four Diagonal fifty percent level on the Fib Expansion Tool".
I understand that... but when you look at the small fours in you're last example, it seems to me that the time to enter the trade at the midpoint of the Four Diagonal is very limited because you have to wait until the renko bar is completely formed. only then you know the price is moving in the right direction.
In case of the small four's: if you wait for the renko bar to close, the midpoint of the Four Diagonal is already past.

Can you please explain how you enter these trades?
Do you place a pending order with a buy stop/sell stop?
or do you wait till there is a "bigger four"?

Thanks

I like to enter on the 50% of the diagonal of the Four. However, as you have noticed, that is often not possible in smaller Fours. So you ask a very good question.

If you use a fractal to fractal diagonal for the Four they are generally bigger. As the wick forms on the opposing fractal you get an advance clue. I place a pending order on the 50% level and adjust it as the diagonal of the Four develops. Start at the wick and adjust as the next wick in the opposite direction forms.

On small Fours the 50% level can be hit with one brick, before you can actually place the trade there.

(You can see on the last trade that I missed the 50% entry and still made money by trading the break out past the fractal as there was a good Reward Level to try for. So even with a missed 50% entry there is still a trade to be had.)

We also have a one minute chart to look at. To date, I have not really talked about the M1 chart a lot. I will soon get around to explaining how I use it to time entries.

Your question is a very good one and I will answer it in detail after I add two brick sizes to one chart. Let me do that next and then I promise to really open it up with some M1 discussion.

OK. It is time to really ramp this up a notch (again.) I hope that this actually makes things more simple - though at first it may be confusing.

I am going to show you how to add a second layer to any Renko Chart and also to the M1 chart. I hope this will start to answer Calcue's question and some previous questions about the 30 pip brick chart and its relationship to the 10 pip brick chart.

Here is where they become one chart.

I have attached a zip file with the Renko Shade 3 indicator and its sound files. You will have to find the sounds folder in your MT4 and copy the NBU and NBD wav files into it.

Add the RenkoShade3 indicator to your M2 chart (the 10 pip brick chart) with these settings:



Your chart should look like this.



I have a trade going so you can check that out too. The divergence on the AO tells me we are changing direction
I am not sure how this one will go so I will be cautions and maybe just take profit at the Flat level.


I can't post for a while now as I have other things to do, so have some fun and see what a 30 on a 10 tells you.

Don't forget to zoom way out. Also experiment with turning the 10 pip chart off by setting it to line display with no color in the lines display properties.

Believe me, this combination of 30 and 10 on one chart is powerful. When we involve the M1 it is even more so.

Hi WAB, I have been absorbing your wonderful thread over the last few weeks and I am grateful and thrilled to find such well thought out strategy so clearly and easily explained. Thank you WAB and your fellow contributors. I finally believe I can see my way to success in this challenging forex trading. Cheers Alan.

Thanks Alan.

It helps me a lot to explain things to others. They pick up on the things I am not totally clear on and force me to tighten up my strategy.

There will be lots more ahead:

First will use Renko Shade and M1/Renko Shade charts. Then, there is trade management and money management. I might even get into robots
and Renko.

I hope that traders step in and share their use of the method and support each others understanding of it.

Great thread Wab.

Nice to be able to analyze charts that work even in the Asian session I trade.

If like me you want to label your charts with HH, HL LL LH etc use the text button labelled with an "A" on your tool bar. Once you've applied them for the first time its easy to copy them by pressing your "Control" key whilst selecting the text you've used previously. Then just drop it over the next hi or lo you are labeling! Saves a bit of time.

Blessings. Bat.

Hi,

What is the name of the indicator on your chart that looks like Suns showing main trend direction change? Thanks

Semafor. Be careful it will adjust itself with price. You'll find a copy here:
http://www.forexfactory.com/showthre...85#post8275085

Forexaz, the indicator is a semafor. I have attached a few for you to look at in a zipped file. Batavier may have one of these or a different one.

Thanks for the heads up on the labels Batavier, that will be most helpful to people.

I also find my schedule and time zone have me looking in the Asian session for trades. Renko moves independent of time and that is a help.