Misleading Renko chart back test results. - page 2
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I use Renko all the time in both MT5 and MT4 but only coupled with a longer timeframe. For example, I attach two EURUSD charts, one H6 and one with median Renko bricks are attached. Renko is a price visualization but not really a trading system. It helps understand and time trades but does not work well by itself and you end up selling at highs and buying at lows in addition to the wicked whipsaws that can plague a poorly optimized Renko chart.
I get the overall trade off the H6 chart and I toggle it with the D1 to make visual double checks. I have the Median Price (H+L/2) price charted with a line with a moving average of one period and the normal line chart only uses price close. I like to smooth the trend direction in this way and I have a Bollinger Band indicator that uses short periods and 0.2 deviations just to indicate flat movements.
The major adjustment I work with is the Renko brick size so that fewer false 2-brick reversals are indicated that leads to lots of whipsaws. To catch a good trade you really need 4-5 bricks in one direction. Increasing brick size to multiples of the spread will do much better than picking something like 5 pips, 10 pips, etc. Larger bricks are more reliable but also increase the risk with the number of pips the bricks will swing as reversals are indicated. My Renko setting is 75.
When trading I trade in the direction of the overall trend only and use Renko for timing.
Good luck.
I use Renko all the time in both MT5 and MT4 but only coupled with a longer timeframe. For example, I attach two EURUSD charts, one H6 and one with median Renko bricks are attached. Renko is a price visualization but not really a trading system. It helps understand and time trades but does not work well by itself and you end up selling at highs and buying at lows in addition to the wicked whipsaws that can plague a poorly optimized Renko chart.
I get the overall trade off the H6 chart and I toggle it with the D1 to make visual double checks. I have the Median Price (H+L/2) price charted with a line with a moving average of one period and the normal line chart only uses price close. I like to smooth the trend direction in this way and I have a Bollinger Band indicator that uses short periods and 0.2 deviations just to indicate flat movements.
The major adjustment I work with is the Renko brick size so that fewer false 2-brick reversals are indicated that leads to lots of whipsaws. To catch a good trade you really need 4-5 bricks in one direction. Increasing brick size to multiples of the spread will do much better than picking something like 5 pips, 10 pips, etc. Larger bricks are more reliable but also increase the risk with the number of pips the bricks will swing as reversals are indicated. My Renko setting is 75.
When trading I trade in the direction of the overall trend only and use Renko for timing.
Good luck.
Thats a good renko generator , the MT5 equivalent mostly , i like the provision of the reversal offset which allows for further noise reduction.