Renko Midline Reject Trade Setup Brick Patterns

In this trading video, I want to go through 3 different renko chart segment brick moves and the potential trade setups, especially for our renko midline reject trade setup and the related brick patterns.

Be sure to note the discussion about the renko brick pattern that the trade setup is based on, compared to a similar pattern where the trade was still done, because of very good price continuation setup components.

This renko chart is being discussed after a large left side directional price move has lost momentum and then had a number of price envelope reversals.

The yellow dot at the left side of the chart was not a trade that was done, although it was a midline reject – you can see that mex had gone extreme and had crossed real time before the swing resumption.

Renko Trading Chart – Midline Reject Trade Setups

Chart Segment1

• Do you see an exit for the left side long
  • No, you are looking at resistance first being retested as support and then being retested as a support double bottom
  • The trade is held regardless of the renko price envelope reversal
  • Do you see a midline reject trade sell setup
    • No, what you are actually seeing is a midline reject price breakout initial reverse
    • Our midline reject trade sell setup would have this same red-green-red brick pattern – but the first red brick would be the initial reverse, making the green reject brick and red reversal brick having mex flow

Chart Segment2

Now we are looking at chart segment2, and I had held my long on the support breakout to see the renko brick price action.  If we had gotten another red brick, I would have gone flat.

• If flat on the yellow line breakout, there was no resumption buy setup

And if we got that yellow line-blue circle midline reject setup we just discussed, I would have reversed to short.

So, long at the high of the chart, and then you can see another price envelope reverse:

• Do you see a renko midline reject trade sell setup and entry timing
  • Yes, and this time the price envelope reverse synchs with the first red renko brick – so the green reject brick and red reversal brick are with mex flow
• Do you see a combination support to resistance and midline reject sell setup that could be done as an addon
  • Point out the brick pattern – green-green-red –vs- red-green-red
  • And here is an issue – the exact brick pattern –vs- the midline reject setup components for price continuation
  • Those definitely exist, including additional breakout through the triple bottom breakout of the 2 blue square support
• Is a short trade if done, still short at the brick making the swing low
  • No, the sell addon was exited after the price momentum divergence low and the 2 green renko bricks breaking the midline
    • And then the initial sell was exited on the price envelope reverse – there was no buy setup

Chart Segment3

• Do you see a midline reject trade sell resumption setup
  • No, although there is a midline reject it is inside of consolidation and it is against momentum
• Do you see a midline reject trade buy setup
  • Yes, but again we have the red-red-green –vs- green-red-green renko brick pattern
    • But we have a very good continuation setup through the resistance triple top breakout
    • With the diagonal breakout potential from the sell swing

This was a good renko trading chart to discuss, because there were a number midline rejects that didn’t have the full setup components for taking the trade.

On the other hand, there were 2 very good midline reject trade setups that didn’t have the exact renko brick pattern we are looking for.

However, the setup had very good price continuation components – and I think that price ease of movement for directional trade continuation is most important and the trades were done.