In this post I will be reviewing the Renko Charting Package. Renko charts display bars as block of pip movement rather than displaying the bars based on time. If you were to set a renko chart to display block of 5, a block would only appear once price has moved either 5 pips up or 5 pips down. Standard time based charts do not care about movement, they form a bar after an allocated amount of time whereas renko block form depending on how long it takes for price to move the pip distance set for the renko blocks. That is a simple overview but the most important factor is that renko charts can help to filter a lot of noise out of the market movements and clearly show trends and support/resistance levels.
Renko Charting Package
The Renko Charting Package turns your MetaTrader 4 charts into renko charts easily and efficiently, allowing you to choose the size of the renko block. If you only want blocks every 10 pips movement up or down you can set the renko block to 10 and clear a lot of noise out from ranging markets plus help yourself pin point obvious levels of support/resistance. Renko is derived from Japanese word “Renga” or brick which ignores time and the movement is based solely on price
It is rare to find the correct renko solution for MetaTrader 4 without digging around and going through complex setup procedures. This Renko Charting Package removes all the hard work and contains instructions for a quick and easy renko charting setup. Surprisingly MetaTrader 4 does not include renko charting by default which I think would be a great addition – until then, this is a solution for getting renko charts and allows you to add any indicator you want to trade on them although renko charts can be traded naked as they tend to give a clearer overview of price action than your standard time based charts.
You are able to modify the Renko settings on your platform by choosing the brick size and timeframe that you prefer. When setting up an initial Renko trade from the chart type menu, the bricks are auto-calculated. To select your own settings, click on the Renko Chart settings which will bring up the Renko settings. Type in the brick size and select the desired chart timeframe. In this case, bricks will be based on closing prices from this timeframe.
What are Renko Charts?
A Renko chart is a type of financial chart of Japanese origin used in technical analysis that measures and plots price changes. A renko chart consists of bricks, which proponents say more clearly show market trends and increase the signal-to-noise ratio compared to typical candlestick charts.
The price must move a specified amount to create a Renko brick. When the price is rising, the Renko bricks are white or green. When the price is falling, the bricks are black or red. This makes it easy to spot the current direction in which the price is moving.
When utilised correctly, Renko charts can help to eliminate confusion based on price direction and can be incorporated into a trend trading strategy. You can learn how to use Renko charts, how to change their settings when setting up a new trade and how they differ from other types of price chart with the Ranko Charting Package.
Renko charts are effective in identifying support and resistance levels since there is a lot less noise than a candlestick chart. When a strong trend forms, Renko traders may be able to ride that trend for a long time before even one brick in the opposite direction forms.
A lot of traders face the issue of renko charts repainting. Repainting means that you suddenly see a green renko being formed only for it to be turned into a red renko. For example, if you keep the time frame at 1 hour, candles can get repainted any time before the completion of 1 hour.
As an example, let’s analyse the below Euro 50 Index price chart. If a 35-brick size is chosen, this means that the price needs to move 35 points from the closing price of the prior brick in order to form a new brick in the current direction. Since bricks can’t form beside each other, the price needs to move 70 points to form a brick in the opposite direction. Only moves of 35 points, in this case, are highlighted by the bricks. Moves smaller than 35 points (from the previous brick) will not form new bricks.
Renko Charting Package Summary
If you are new to renko charts and want to see how useful they can be then head on over to the Renko Charting Package website by clicking below. Even the more experienced forex traders who haven’t experienced a renko chart before could benefit by adding this option to their trading arsenal – I find that it makes the charts a lot easier to look at and interpret.
Of course, whilst renko charts can make charts better to look at and easier to interpret, you will still need to build your own trading strategy and have sensible money management. It does not matter how pretty the charts are withing your trading platform, without a solid trading strategy in place and a decent risk to reward ratio, things can be difficult.
Renko charts tend to filter out small price movements. This chart type is therefore good at highlighting trends and can even be used as a type of trailing stop-loss.
You are free to use the renko charting package on any trading instrument or chart timeframe that you wish, so it is very versatile. It can be used for scalping, day trading and swing trading. You will need a MetaTrader account and the MetaTrader platform, which you can get free of charge from most forex brokers.
Overall, I fell that the Renko Charting Package is a great tool for anyone who already has some experience trading with standard candlestick charts and want to take their manual trading to the next level. Just remember that this is not a set and forget solution, it does require significant user input and may be too complex for the absolute beginner.
Self-confessed Forex Geek spending my days researching and testing everything forex related. I have many years of experience in the forex industry having reviewed thousands of forex robots, brokers, strategies, courses and more. I share my knowledge with you for free to help you learn more about the crazy world of forex trading! Read more about me.