Actual Renko - page 2

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Renko Brick size

Hi

I have a question to the people who are familiar with Renko charts: I'm looking for the optimal brick size (not an arbitrary number, but rather a formula to calculate it).

In fact what you are doing is making the trade-off between the number of swings the chart makes and the size of the bricks. Evidently I could use a solver in excel but there must be another way to quantify this.

Any suggestions or people who have the same problem?

 

Try

Program an EA with Renko indicator with the block size as an extern variable. Now you can optimize your profit (it can be a small loss as well) by changing the block size. This is the best way I know of. You also have an EA which you can use to trade if somethingis profitable.

Regards

Derik

 
 

Sounds like Range Bars.

There is a thread on TSD about them.

Mart

MrM:
Hi,

has anyone ever tried to make renko charts (candles that are based on number of pips in one direction: candles close after e.g. 20 pips up or down, and don't close after a certain period of time e.g. 15min)? I have found a custom indicator that displays a renko indicator at the bottom of the chart, but I need the actual candles in my chart to be "renko candles".

thx
 

this is a good question

Does anyone have ideas on how to calulate,

Maybe using atr or adr for 1h or day or something

MrM:
Hi

I have a question to the people who are familiar with Renko charts: I'm looking for the optimal brick size (not an arbitrary number, but rather a formula to calculate it).

In fact what you are doing is making the trade-off between the number of swings the chart makes and the size of the bricks. Evidently I could use a solver in excel but there must be another way to quantify this.

Any suggestions or people who have the same problem?
 
 

From Nison book Beyond Candlesticks:

The renko chart, shown in Exhibit 7.'1,,i s also termed a neri, training,or zigzag chart. The renko charts looks similar to the three-bar break chart since they both have lines that look like blocks. The individual blocks that form the renko chart are sometimes referred to as bricks (the term renko may come from "renga," which is the Japanese word for bricks).

As we saw in Chapter 6, in a three-bar break chart, another line is added as the market moves in the direction of the prevailing trend, no matter how small the move. For example, if the market closed today by even one tick higher, a new white line would be added to the three-line break chart if the prior line was white.

However, for a renko chart, a line is drawn in the direction of the prior move only if a fixed amount has been exceeded. For example, if there is a white brick on the renko chart, the market has to advance by a predetermined fixed amount before a new white brick can be drawn.

Another difference between the renko and three-line break chart is that the lines in the three-line break chart are of different sizes, while the bricks in a renko chart are all the same size.
The renko chart uses closing prices. The first step is to choose a price range unit. This price range point is the minimum amount the market must move before a renko brick is drawn. The price range point also serves to set the height of the brick. Thus, a five-point renko chart would have bricks that are five points tall. This will become clear after I go through the following detailed example. An important aspect of the renko chart is that rising lines are denoted by equal size white bricks and falling lines are denoted by equal size black bricks. Thus, no matter how large the move, it is shown on the renko chart as equal sized bricks. For example in a five-point renko chart, a 20-point rally is displayed as four five-point-high renko bricks.
 

When to buy/sell

Hi Rick,

You would buy/sell when the first color change would occur. At least that is how I do it. The previous position is closed when the new position is opened.

happy trading.

 
fxadvisory:
Hi Rick,

You would buy/sell when the first color change would occur. At least that is how I do it. The previous position is closed when the new position is opened.

happy trading.

Thanks for your answer.

When I look at a chart with this...Do the bricks underneath the price line up wih the price on the chart?

I have this on a 1 min. chart and i see different color changes under the price but not enough movement to warrant those changes

 

Renko Indicator and Chart are not linked vertically

Hi Rick,

The indicator is completely independent of the horizontal time axis of the chart. Therefore, you will not see any vertical correlation at all between the 1 min chart and the Renko indicator. If you are using a 75 pip box and you can catch a 75 pip move within your screen view, you should see a new Renko Box appear.

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