Renko Charts Indicator for MT4

Renko Charts Indicator for MT4

Introduction to Renko Charts Indicator

The Renko Chart is a type of price charting which was also developed in Japan. It was first introduced to the traders in the United States by Steven Nison in his book, Beyod Candlesticks.

Renko Charts are charts that use bricks instead of candles to represent price changes. The bricks are usually of equal size, but they can be of different sizes. The bricks are placed on the chart when the price moves up or down by a certain amount. This amount is called the box size.

Renko Charts get their name from the Japanese word “renga”, which means “brick”. This is because the boxes on Renko charts look like stacked bricks.

Renko Charts can be used to trade any market, but they are most commonly used in the Forex market. Renko Charts can be used to trade any time frame, but they are most commonly used on lower time frames such as the 1-hour chart or the 4-hour chart.

What is the Renko Charts Indicator?

Traders use Renko Charts to more accurately plot price movements. This is done by using an indicator that automatically plots price movements using the Renko Chart method. Traditional price charts show price movements over time, with the y-axis showing price levels and the x-axis indicating time periods in minutes, hours, days, or more.

Renko Charts are different from other types of price presentations because they ignore time and focus only on price movements. This creates a chart that effectively shows trends and momentum based on price movements, using “bricks” or blocks to represent each unit of price movement.

How does the Renko Charts Indicator Works?

Renko Charts use blocks to show how much the price has changed. In the example above, each block is worth 40 points on the GBPUSD pair. If the price goes up by 4 pips or 40 points, then the Renko Charts indicator will plot a blue block. If the price goes down by 80 points or more, it will plot two red blocks down.

Traders can change the number of points or pips each brick represents to fit the currency pair and time horizon they are trading.

How to Use Renko Charts for MT4?

As mentioned above, the Renko Charts plot price movements over time, regardless of how long that time is. This means that the bricks on the Renko Chart won’t always match up with the Japanese candlesticks on the main price chart. Some traders who use Renko Charts only look at the Renko Chart and don’t pay attention to the Japanese candlesticks at all. They might even minimize or get rid of the actual price chart so they can see only the Renko Chart.

If you see blue bars on the Renko Chart, it means that the momentum or trend is reversing. When this happens, you can buy. If you see red bars, it means that the trend is continuing and you can sell. You can also enter a trade when there are a certain number of bricks moving in the same direction.

Buy Trade Setup

When to Enter?

Wait for the price to reverse and go up. When it does, three blue bricks should form on the Renko Chart. That is your signal to buy. Set a buy stop order at the price of the high of the third brick. Make sure to set your stop loss at the price of the low of the brick that is three bricks behind where you expect to enter into the trade.

When to Exit?

Make sure your stop-loss is set at the price corresponding to the third brick behind the current Renko Chart brick. If the price hits your stop loss while you are still in profit, then the trade will end automatically.

Sell Trade Setup

When to Enter?

Wait for the price to reverse down and the Renko Charts to form three red bricks. When it does, determine the price corresponding to the low of the third red brick. Place a sell stop order at that price level. Set the stop loss at the price corresponding to the high of the brick three bricks behind where you expect to enter into the trade.

When to Exit?

When the Renko Charts brick is three bricks behind the current brick, set the stop loss at that price. If the price hits the stop loss while in profit, allow it to happen.

Conclusion

There are many ways to trade the Renko Charts. The example above is just one way. You can adjust the number of boxes you use to determine when you want to enter a trade, and how many pips you want the Renko bars to be based on.

The Renko Charts indicator is a very useful tool for trading momentum and trends. However, traders need to spend some time getting used to it so they understand how it works before using it in their trades.

Renko Charts and candlesticks do not match up. This means that traders need to watch the Renko Chart to see if momentum is reversing or not.

If you are a disciplined trader who can look at price charts for a long time, then the Renko Charts can be a very effective tool for trading trends and momentum reversals.

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