Advanced Technical Analysis: Renko Chart Trading Strategy

Hello everyone, How are you doing, I welcome you again to my blog in the Steem Alliance community.

Today, we will discuss an interesting topic on the platform which will be: Renko Chart Strategies

---

• Introduction to Renko Charts

---

Renko charts are a form of technical analysis chart that only shows price movement, and ignores time and volume.

The word "Renko" comes from the Japanese word for "brick", Renko charts are made up of bricks that show a set price change, making it easier to see trends and reversals without the noise that usually appears in time-based charts.

---

How to Properly Build and Understand a Renko Chart

---

Step-by-Step Guidelines

---

1. • Select the brick size you want for your chart:

   • Set a fixed price range for each brick, (e.g., $5), this only works for TradingView Premium Package.

• 

  • The brick size can be changed depending on the asset's volatility and the trader's preferences.

2 . Plotting the Bricks:

• The Brick starts with the asset's closing price.

• Therefore, a new brick is added when the price changes by at least the chosen brick size from the previous brick's closing price.

• Bricks are charted at 45-degree angles, with rising bricks colored differently than downward bricks (for example, green brick for upward and Red for downward price movement).

---

3 . Brick Continuation:

• If the price does not change enough to create a new brick, no new brick is added, then it continues falling or rising.

• Renko charts do not include or consider timeframe; bricks are added only when the price moves sufficiently to create a new one.

---

Trading Strategies with Renko Chart Patterns

---

1: Trend Following Strategy

---

Renko charts are perfect at identifying trends because of their noise-reducing qualities.

• Identify the Trend:

• An upward trend is shown when there is an upward brick(Green) movement.

• A downward trend is seen when there is a downward brick.

---

• Entry/Exit Points:

---

• Get into a long position when the first upward brick appears after the downward bricks, and it's as simple as that, the best thing is to not complicate things and keep it simple and steady.

• You can as well get into a short position at the occurent of the first downhill brick after a series of rising bricks.

• Exit the trade immediately when a brick of the opposite color appears.

---

2. Support and Resistance Strategies

---

Renko charts also make it easier to identify support and resistance levels.

• Identify key levels:

  • Support levels are identified when a series of falling bricks reverses into rising bricks.

• Resistance levels are identified when a series of rising bricks reverses into downward bricks.

---

• Trading Around Levels: Put buy orders near the identified support levels.

• Place sell orders near the identified resistance levels.

• To manage risk, and reduce losses, place stop-loss orders slightly beyond these levels.

---

Conclusion

---

Renko charts offer a simple method for identifying trends, support, and resistance levels, and potential breakouts.

Renko charts help traders make more profitable judgments with less noise by focusing simply on price changes and ignoring time and volume signals.

Renko chart strategy, together with other technical analysis tools can improve a trader's success and profitability.

---

---

^{' NB: This post concerns education, not investment advice. Digital asset prices are subject to change. All forms of crypto investment have a high risk. I am not a financial advisor, before jumping to any conclusions in this matter please do your research and consult a financial advisor}

---