The Turtle Renko Trading Strategy plots the Turtle Channel indicator on the Renko charts. In this guide, we’ll mention what the strategy is all about.
What are the Turtle Channel and Renko Chart Indicators?
The Turtle Renko Trading Strategy uses the Turtle Channel and the Renko Chart indicators to identify the direction of the trend.
The Turtle Channel Indicator was popularized by the famous trader Richard Dennis, who used it to train a group of novice traders known as the “Turtles” in the 1980s.
The indicator consists of three lines: a midline and two outer lines. The midline is a moving average, typically a 20-day simple moving average, while the outer lines are parallel lines drawn a certain distance above and below the centerline. When the price moves above or below the outer lines, it suggests trend continuation or a reversal.
Renko charts are a type of chart used in technical analysis that focuses solely on price movements. Unlike traditional candlestick charts or line charts, Renko charts are constructed using only price data and don’t consider price and volume.
The Renko charts aren’t accessible on MT4, so you must add the Renko chart indicator for the Turtle Renko Trading Strategy.
Turtle Renko Trading Strategy
The Turtle Channel and the Renko chart Indicators act as confirmations, so you can use them without applying any other indicators. For the strategy, it’s important to know how the indicators work.
Renko Chart indicator draws a series of bricks or blocks in a vertical direction, with each brick representing a fixed price movement. When the price increases or decreases by the specified brick size, a new brick is added to the chart in the corresponding direction.
If the price moves in the opposite direction, no new brick is added until the price moves the specified distance in the opposite direction.
If the Turtle Channel shows blue lines, it suggests an uptrend, whereas the red line suggests a downtrend. Sometimes the price may not reverse as indicated by the Turtle Channel, so that’s when the Renko chart adds a confirmation.
Buy Signal
- The Renko Chart Indicator must plot blue bricks.
- The Turtle Channel should show blue lines.
- Place a stop-loss at the recent swing low.
- Set take-profit at the previous high or exit the trade when the Turtle Channel shows a red line or the Renko changes to red color.
Sell Signal
- The Renko Chart Indicator must plot blue bricks.
- The Turtle Channel should show blue lines.
- Place a stop-loss at the recent swing low.
- Set take-profit at the previous high or exit the trade when the Turtle Channel shows a red line or the Renko changes to red color.
Turtle Renko Trading Strategy Pros & Cons
Here are the pros and cons of the strategy:
Pros
- Both indicators confirm the trend’s direction.
- You can use it on all timeframes.
Cons
- The Turtle Channel can be confusing for beginners.
Conclusion
The Turtle Renko Trading is a trend-following strategy that combines the Renko chart and the Turtle Channel indicators. Both indicators act as confirmations and can be useful in multiple trading strategies.
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