Anyone use renko ?

Pat494

Legendary member
14,621 1,579
Renko does show the directional trend and cuts out a lot of noise.
Do you use it ?
With mov averages perhaps
This is the S&P 500 daily
 

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Solas0077

Active member
236 14
Good question Pat. Do you have an interpretation of what the bars mean? We know what OHLC bars mean, we know what constant volume bars mean but what do Renko bars mean?
 

Pat494

Legendary member
14,621 1,579
Good question Pat. Do you have an interpretation of what the bars mean? We know what OHLC bars mean, we know what constant volume bars mean but what do Renko bars mean?

I was hoping you were going to tell me, but alas..........

Renko Charts



Introduction


Invented in Japan, Renko charts ignore time and focus solely on price changes that meet a minimum requirement. In this regard, these charts are quite similar to Point & Figure charts. Instead of X-Columns and O-Columns, Renko charts use price “bricks” that represent a fixed price move. These bricks are sometimes referred to as “blocks” or “boxes.” They move up or down in 45 degree lines with one brick per vertical column. Bricks for upward price movements are hollow while bricks for falling price movements are filled with a solid color (typically black).

Construction and Characteristics


Renko charts are based on bricks with a fixed value that filters out smaller price movements. A regular bar, line or candlestick chart has a uniform date axis with equally spaced days, weeks and months. This is because there is one data point per day or week. Renko charts ignore the time aspect and only focus on price changes. If the brick value is set at 10 points, a move of 10 points or more is required to draw another brick. Price movements less than 10 points would be ignored and the Renko chart would remain unchanged.

Using the S&P 500 10-point Renko chart as an example, a new Renko brick would not be drawn if the S&P 500 were at 1840 and advanced 9 points to 1849. If the S&P 500 then advanced to 1850 the very next day, a new Renko brick would be drawn because the entire move was at least 10 points. This brick would extend from 1840 to 1850 and be hollow, or white in this example. Alternatively, if the S&P 500 declined from 1840 to 1830, a new Renko brick would be drawn and it would be solid, or black in this example
 

Pat494

Legendary member
14,621 1,579
fwiw - I use the Three Line Break. (y)

Thanks - I will have a look.

Yes, it has it's points. It may be better to use the Opening rather than the Close though ?
 
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M

member275544

0 0
Renko does show the directional trend and cuts out a lot of noise.
Do you use it ?
With mov averages perhaps
This is the S&P 500 daily

Occasionally I use it Pat, as you say it makes reading the charts much easier. Depending on the brick size you use however..
I have backtested various methods, using traditional candle and renko and often find renko comes out on top
Just bear in mind though that two renko charts will never be the same, even if we use the same settings as each brick is drawn from the start point of the data set. if that data set is different, our analysis will be different
its a drawback to its method but as long as you are aware of this, it shouldn't hinder your analysis it just makes your interpretation, and mine completely different
You haven't stated the settings you're using, so I can't give an example
if you do, I'll show you my renko for the s&p
 

Pat494

Legendary member
14,621 1,579
Occasionally I use it Pat, as you say it makes reading the charts much easier. Depending on the brick size you use however..
I have backtested various methods, using traditional candle and renko and often find renko comes out on top
Just bear in mind though that two renko charts will never be the same, even if we use the same settings as each brick is drawn from the start point of the data set. if that data set is different, our analysis will be different
its a drawback to its method but as long as you are aware of this, it shouldn't hinder your analysis it just makes your interpretation, and mine completely different
You haven't stated the settings you're using, so I can't give an example
if you do, I'll show you my renko for the s&p

On my version of Metastock there is only the one they supply and no ability to change the settings. I read somewhere that Nilson recommends using candles together with renko. I use Ichi moko rather than candles as they are more informative.
 

kalott

Established member
736 82
looking for an renko indicator for prorealtime to use with bars like this one for three line break


once t=1
once a0=(close)
once a1=(close)
once a2=(close)
once a3=(close)
if t=1 and close>a3 then
a0=a1
a1=a2
a2=a3
a3=close
elsif t=1 and close<a0 then
t=-1
a1=a3
a0=a3
a3=close
elsif t=-1 and close<a3 then
a0=a1
a1=a2
a2=a3
a3=close
elsif t=-1 and close>a0 then
t=1
a1=a3
a0=a3
a3=close
endif


return a0 coloured by t[1] as "cassure"
 

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timsk

Legendary member
7,604 2,377
Do you use it ?
Hi Pat,
I've had a love affair with Renko for many years now - it's pretty much the only chart I use these days.

Dow_30.03.2015.png


The chart above is the Dow, showing a brick size of 50 points. I like the extra granularity of the wicks - which traditionalists don't use - as it helps to show the strength and momentum of a move.

I've never understood why more traders don't use Renko. The clarity and simplicity of the chart is so refreshing: trend and SnR levels scream out at you and you don't have to spend forever analysing the 'meaning' and significance of each brick in the way that users if bar and candlestick charts are prone to doing.

"Just bear in mind though that two Renko charts will never be the same, even if we use the same settings as each brick is drawn from the start point of the data set. if that data set is different, our analysis will be different. . ."

I understand (I think) Malaguti's point, but that same observation could be made of bar or candlestick charts. Take a 5 min chart for example. Instead of starting on the hour with each subsequent candle starting at 5, 10, 15 minutes etc. past the hour - they could start at a minute after the hour with each subsequent candle starting at 6, 11, 16 minutes etc. Doing that will produce a different candlestick chart. With Renko, most software packages will align the data set with major round numbers - as per my MT4 chart above - which goes 50, 100, 150, 200 etc., as opposed to 60, 110, 160, 210 etc. So, while I think Malaguti is correct in what he says, I really don't think it's a problem or a reason for not using Renko charts. Hope that makes sense?
Tim.
 
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Pat494

Legendary member
14,621 1,579
Hi Pat,
I've had a love affair with Renko for many years now - it's pretty much the only chart I use these days.

View attachment 188168


The chart above is the Dow, showing a brick size of 50 points. I like the extra granularity of the wicks - which traditionalists don't use - as it helps to show the strength and momentum of a move.

I've never understood why more traders don't use Renko. The clarity and simplicity of the chart is so refreshing: trend and SnR levels scream out at you and you don't have to spend forever analysing the 'meaning' and significance of each brick in the way that users if bar and candlestick charts are prone to doing.

"Just bear in mind though that two Renko charts will never be the same, even if we use the same settings as each brick is drawn from the start point of the data set. if that data set is different, our analysis will be different. . ."

I understand (I think) Malaguti's point, but that same observation could be made of bar or candlestick charts. Take a 5 min chart for example. Instead of starting on the hour with each subsequent candle starting at 5, 10, 15 minutes etc. past the hour - they could start at a minute after the hour with each subsequent candle starting at 6, 11, 16 minutes etc. Doing that will produce a different candlestick chart. With Renko, most software packages will align the data set with major round numbers - as per my MT4 chart above - which goes 50, 100, 150, 200 etc., as opposed to 60, 110, 160, 210 etc. So, while I think Malaguti is correct in what he says, I really don't think it's a problem or a reason for not using Renko charts. Hope that makes sense?
Tim.

Interesting Tim. I just had a look at my MT4 platform and it has no renko or 3 line. I am supposing you bought an extra add-on ?
 

Splitlink

Legendary member
10,850 1,234
Yes, it makes a lot of sense, The consistency of one's thinking is the more important--decide and stick with it. No chopping or changing.
 

timsk

Legendary member
7,604 2,377
. . . I am supposing you bought an extra add-on ?
Hi Pat,
The Renko EA that I use is free to download: Renkolivecharts_pimped_v4_13
It works fine as far as I'm aware although, to be honest, I haven't cross checked it with another chart. Occasionally, the wicks go haywire - usually when one first loads a new instrument - and then it magically sorts itself out! If you're interested in trying this version out, you might like to copy and paste verbatim the EA's name into Google - as there are various YouTube vids about it.
Tim.
 
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M

member275544

0 0
Hi Pat,
I've had a love affair with Renko for many years now - it's pretty much the only chart I use these days.

View attachment 188168


The chart above is the Dow, showing a brick size of 50 points. I like the extra granularity of the wicks - which traditionalists don't use - as it helps to show the strength and momentum of a move.

I've never understood why more traders don't use Renko. The clarity and simplicity of the chart is so refreshing: trend and SnR levels scream out at you and you don't have to spend forever analysing the 'meaning' and significance of each brick in the way that users if bar and candlestick charts are prone to doing.

"Just bear in mind though that two Renko charts will never be the same, even if we use the same settings as each brick is drawn from the start point of the data set. if that data set is different, our analysis will be different. . ."

I understand (I think) Malaguti's point, but that same observation could be made of bar or candlestick charts. Take a 5 min chart for example. Instead of starting on the hour with each subsequent candle starting at 5, 10, 15 minutes etc. past the hour - they could start at a minute after the hour with each subsequent candle starting at 6, 11, 16 minutes etc. Doing that will produce a different candlestick chart. With Renko, most software packages will align the data set with major round numbers - as per my MT4 chart above - which goes 50, 100, 150, 200 etc., as opposed to 60, 110, 160, 210 etc. So, while I think Malaguti is correct in what he says, I really don't think it's a problem or a reason for not using Renko charts. Hope that makes sense?
Tim.

not quite Tim, what period is your Dow chart? or is it tick?
 

timsk

Legendary member
7,604 2,377
Another freebie that looks interesting (although I don't use it myself) that overlays Renko on candlestick charts and shows you what Renko is doing in different brick sizes: ZIG Renko Charting Suite
 
 
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