Renko Systems - Lecture notes 1 PDF

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Renko systems...

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Renko Trading Strategy #1

For this Renko trading strategy, we only need to use the RSI indicator. We like to use a 20-period RSI indicator. So, the period is the same as the ATR Renko brick size. See the Renko chart scalping above: After we spot the momentum divergence an entry signal is triggered once we get a reversal. On the Renko chart, a trend reversal is set in motion once the brick changes color. In this case, when we spot a bearish divergence, enter a short position after the brick turns red. For bullish divergence, wait for the brick to turn green.

We exit our profitable trade once another reversal pattern is formed in the opposite direction of our trade. As a method to protect our account balance and not lose too much, you can place your SL above and below the swing point developed after your entry. A lot of the noise inherent in regular time-based charts are eradicated. So, if you trade with Renko charts, spotting divergence and trend reversals are a lot easier. The RSI is the best indicator to use with Renko. Renko Trading Strategy #2

Another profitable Renko strategy you can use is to focus only on the bricks. No additional technical tool is required for this system. We’re going to explore a very simple and yet very powerful Renko chart pattern that incorporates the wicks. This Renko price pattern looks for two consecutive bricks of the same color and both bricks have wicks. The location of this Renko pattern doesn’t really matter. It can be at the end or middle of a trend. This pattern has a very high rate of success if traded in the right context. You have to look around these two brick patterns and make sure the blocks are not moving back and forth within a trading range. If that’s not the case, then you have a green light to take the signal generated by this trade setup. The entry is on the third brick after the two bricks that have wicks. The stop loss can be placed above the wicks and exit once a reversal pattern is produced....