When it comes to traders making use of these specialized chart types, Renko charts have a distinct advantage. Renko brick traders tend to be more comfortable trading this chart type than switching to other forms, despite the fact that the more common candlestick or bar charts are still widely preferred. The number of traders developing novel Renko trading strategies is on the rise, as can be seen by a quick look at some of the most popular trading forums.
You might be wondering what exactly a Renko chart is.
To begin, it is not a holy grail chart that will reveal details that others do not. Renko charts are merely a graphical representation of price in the form of bricks on the charts.
The first time you look at a Renko chart, especially if you haven’t seen one before, can be eye-catching. Renko and Heikin Ashi charts might actually have some similarities, at least in terms of trends, if you’ve been around the markets for a while. But the difference ends there. Renko bricks are different from other charts, like Heikin Ashi, which use time as a factor because the charts are built with price.
Because of this one-of-a-kind feature, Renko bricks only display price and, by extension, trends. The fact that Renko charts make trading much simpler thanks to the absence of noise in the price bricks is what most traders find appealing about them. We are all familiar with the well-known expression, “Your friend.”
Renko boxes are widely used in stock and futures markets as well as the Forex market. Nothing compares to this for a technical analyst who prefers to trade price action. You can clearly see everything that price is doing, from chart patterns to levels of support and resistance.
Traders who, regrettably, expect their trading to turn around frequently use Renko charts, which may be because of this feature. However, this is rarely the case. No chart, existing or future invention, will be able to assist you in making profits from trading if you do not comprehend market dynamics concepts.
But when there are so many other regular, conventional, and unconventional charts from which to choose, why use a Renko chart type?
It is purely a matter of preference, as previously stated. Renko charts, as opposed to Heikin Ashi or candlestick charts, can provide a lot more information for skilled technical analysts. If you don’t care about time but instead want to see what price is doing, this kind of chart can be helpful as well. And it is true that, despite the numerous conventional chart types, some important market information can be missed when using these charts because of their nature.
Renko charts have a number of advantages that are worth considering.
Indecisiveness regarding the price: Price indecision typically refers to price swings in conventional chart types. This is also evident on Renko charts, where you can see these ranging price patterns with prices going nowhere and consecutive bricks plotted up and down, but there is an advantage.
The advantage is that these zones of consolidation or uncertainty are simpler to identify. And if you’re good at technical analysis, you can figure out why the market is acting the way it is by looking at past price action.
Reversals in a trend: Although there are a lot of articles on how to trade pullbacks, the reality is that it can be difficult to trade in real time unless you are familiar with and confident in your trading strategy. With Renko, trend reversals are much simpler to spot and require little subjective judgment.
More opportunities for trading: Renko charts can show you different ways to trade, whether you want to scalp the markets or invest for the long term. The charts make everything easier, from taking profits every ten ticks to riding trends or even trading against trends. Everything depends on the size of your Renko brick.
In conclusion, renko charts might be worth your time if you’re looking for a different way to trade the markets rather than just trying to find the next holy grail. However, you need to be open-minded and willing to look into the possibilities.
The first and only website dedicated to teaching traders how to trade with Renko and Median Renko charts is http://renkotraders.com. There are a lot of tried-and-true renko trading strategies and practical trading examples included in the free information.
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