The Renko Plus charts for traders
Renko charts or candlestick charts?
Renko charts only show price movements of a certain size. When no price of a size defined by the trader occur, the charts remain unchanged. Time is not relevant in renko charts.
Candlestick charts show all price movements in a time frame chosen by the trader. For example, a 5-minute candlestick chart shows all price movements per 5-minute period.
Most traders probably agree with the logic that price movements of a certain size are the most important factor. Still by filtering all other information out of the chart, the trader loses useful information. The trader also loses his impression for the speed and movement of the market.
Renko Plus charts offer the best of both worlds.
The Renko Plus charts
Remember, in regular renko charts a brick is only drawn when the price movement is of a minimum size defined by the trader. This implies that after a brick is drawn, to have the next brick in the other direction, double the minimum price movement must occur.
This example shows a regular renko chart. A renko brick is only drawn when the market price makes a price movement of a size defined by the trader. If no such price movement occurs for, say, two hours, the renko chart is not extended in those two hours.
This example shows a Renko Plus chart. The chart shows both renko blocks and candlesticks. Like in the traditional renko chart, the renko blocks are only drawn when a minimum price movement is completed. The renko block is superimposed over the candlestick chart. Another unique and helpful feature is the renko target line. The line indicates the price level at which the next renko block would be drawn.
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Renko Plus charts for scalping
Scalpers and very short-term traders can also use Renko Plus charts.
This example shows Renko Plus charts used in scalping. All the ticks traded in the market are visible between the renko bricks.
Renko Plus trading signals
As usual in the NanoTrader trading platform (free demo), the Renko Plus charts can be used to generate trading signals. The trading signals can be used to automate orders. Traditionally traders use a change of direction in the renko chart as a signal. Adding a trend filter to only accept signals in the direction of the trend can be wise.
The buy signals
This example shows a buy signal on the DAX index. A green renko brick follows a red renko brick.
The short sell signals
This example shows a short sell signal. A red renko brick follows a green renko brick.
The Renko Plus charts in the trading platform
1. Open the chart of the instrument you wish to trade.
2. In the WHS Proposals folder, select the tools folder and select Renko Plus.
3. If desired, change the settings in the Designer Dialog window.
4. Activate TradeGuard+AutoOrder or AutoOrder to trade (semi-)automatically.