Renko Chart Trading System

Renko chart is made by Japanese, this indicator just concerned with market price, volume and time frame are not used. Renko chart shape is like a bricks. Blue brick indicates that market price is bullish and red brick indicates that the market price is bearish. Renko chart has no shadow like candlestick chart. This chart indicator is used by foreign exchange trader to determine support and resistance levels. Renko trading signals are made if the color of the bricks changes or trend changes.



If you are interested with this indicator and want to use it, here are renko trading rules which you can use it in your trading system.
The simple Renko chart trading system
- Open buy position if Renko chart move bullish and the color is blue
- Open sell position if Renko chart move bearish and the color is red.

You can also use this indicator with trend lines to determine support and resistance levels. This support and resistance levels is like trading chart pattern in forex candlestick chart. Here are the example of trading chart pattern using Renko chart indicator.



Check these following reviews about Renko chart
- Determine the market trends and trend reversals
- Identify chart patterns such as double tops and double bottom, head and shoulders, triangle chart pattern and etc.
- Determine continuation chart pattern.
- Determine the support and resistance levels.

Renko chart is based on Japanese word "Renga" and it is mean "brick". Renko chart is unlike three line break chart or even traditional trading chart candlestick. The Renko chart has no Open high low and close price. Renko chart only uses bricks as visualize. But how Renko chart constructed ? Renko chart constructed if market prices trade more than brick size below the bottom or vice versa of the last brick. Blue brick is built if market price is trending bullish and red brick is constructed if market price is trending bearish.

How to trade Renko chart / Renko chart trading system
One thing you should keep in your mind is when the brick changes the color, this indicates a trend reversal or trend change just started. Some traders use one brick as a trading signal, but other traders need the confirmation from second or third brick.

Amazingly, if you are like technical analysis, all the method of technical analysis can be applied in renko chart as trading system. Chart patterns, channels, support and resistance levels, and other trading strategy can be used with Renko chart. But I am not sure for fibonacci can be used with Renko.