Renko Chart Day Trading
Renko chart day trading uses chart tick data that is formed into Renko bricks of a fixed size of price movement. By focusing on minimum price moves and ignoring time frames, much of the ‘noise’ that is often typical from different chart types is removed.
For instance, look at the 2 charts below: the top chart is a 120 tick chart for the NQ future contract, while the bottom chart is a Renko chart for the same period – the chart uses 3 ticks of price movement for forming a new Renko brick.
By using bricks of a fixed value and minimum price change, the numerous tick bars of the different and irregular sizes are filtered out – thus making the Renko day trading chart one that is clearer to trade, while also providing for a trading method that is quicker to evaluate and see trade setups.
Adding Renko Charts To The Day Trading Method
What is interesting to me is that I started day trading in 1997, first using time frame charts and then going to tick charts, which I found was a major improvement for chart reading.
The last time that I day traded the NQ future, it was done using a 120 tick chart like the one above. But I also used a 180 tick chart along with the 120 tick, trading the chart with the clearest trade setup at the time.
It wasn’t until 2013 that Renko charts and the Renko trading strategies were were used for our day trading method. And although I could still trade the tick charts – the Renko charts have been too much of an improvement to do so, this is both for my day trading and for teaching the method to other traders.
Currently, the Renko charts are being used for day trading the NQ and YM index futures, along with the Gold and Oil futures.
Renko Chart Day Trading Method Videos
The charts below are intended to provide additional information and an overview for our Renko chart day trading method.
Renko Chart Strategies Video: This video discusses more about the Renko charts and the way the Renko bricks are constructed. Then the video will go over our Renko chart trading indicators – what each indicator is and some of their specific uses for trading.
Renko Chart Trading Indicators
Renko Chart Strategies Video: This video further discusses Renko trading indicators and goes over the Renko method trade setups (1) price envelope reverse (2) midline reject (3) price extreme reverse.
It is also pointed out how these trade setups are used in a trading method -vs- a trading system and introduces the concept of trade filters, which will be the subject of the next video.
Renko Chart Strategies Video: This video discusses the Renko chart trading method useage of trade filters – meaning that there are times are times when a trade setup is not taken as a trade.
Trades are filtered for (1) entries into price support or resistance (2) entries against momentum (3) entries on a counter direction Renko brick (4) entries that occur inside of consolidation.
Renko Chart Strategies Video: This video continues the discussion for Renko chart trading method filters, especially focusing on filtering out trade setups that occur inside consolidation (1) transition into consolidation (2) combining consolidation and method trading filters (3) consolidation characteristics (4) consolidation breakout trade setup.
Trading inside of consolidation is something that my experience has shown is best to avoid. Consolidation trading is not consistently profitably and will typically lead to many losses – the video will show a consolidation period that had 11 potential trades that would have all been losers; these trades were all avoided using the consolidation + Renko method trading filters.
