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Sergey Golubev
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Forum on trading, automated trading systems and testing trading strategies

Indicators: Renko

Sergey Golubev, 2013.09.03 11:03

Renko (extraction from Achelis - Technical Analysis from A to Z)

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Overview

The Renko charting method is thought to have acquired its name from "renga" which is the Japanese word for bricks. Renko charts are similar to Three Line Break charts except that in a Renko chart, a line (or "brick" as they're called) is drawn in the direction of the prior move only if prices move by a minimum amount (i.e., the box size). The bricks are always equal in size. For example, in a 5-unit Renko chart, a 20-point rally is displayed as four, 5-unit tall Renko bricks.

Kagi charts were first brought to the United States by Steven Nison when he published the book, Beyond Candlesticks.




Interpretation

Basic trend reversals are signaled with the emergence of a new white or black brick. A new white brick indicates the beginning of a new up-trend. A new black brick indicates the beginning of a new down-trend. Since the Renko chart is a trend following technique, there are times when Renko charts produce whipsaws, giving signals near the end of short-lived trends. However, the expectation with a trend following technique is that it allows you to ride the major portion of significant trends.

Since a Renko chart isolates the underlying price trend by filtering out the minor price changes, Renko charts can also be very helpful when determining support and resistance levels.

Calculation

Renko charts are always based on closing prices. You specify a "box size" which determines the minimum price change to display.

To draw Renko bricks, today's close is compared with the high and low of the previous brick (white or black):

  • If the closing price rises above the top of the previous brick by at least the box size, one or more white bricks are drawn in new columns. The height of the bricks is always equal to the box size.

  • If the closing price falls below the bottom of the previous brick by at least the box size, one or more black bricks are drawn in new columns. Again, the height of the bricks is always equal to the box size.

If prices move more than the box size, but not enough to create two bricks, only one brick is drawn. For example, in a two-unit Renko chart, if the prices move from 100 to 103, only one white brick is drawn from 100 to 102. The rest of the move, from 102 to 103, is not shown on the Renko chart.


Sergey Golubev
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Sergey Golubev  

Forum on trading, automated trading systems and testing trading strategies

Indicators: Renko_v1

Sergey Golubev, 2013.10.16 08:04

How to Use Renko Bricks and Moving Averages to Find Trades

Talking Points

  • Renko bars help filter the noise
  • Renko bars reveal clearer entries and exits
  • Moving Averages can be used with Renko bars with some minor setting changes to pinpoint entries

Seeing the trend without Forex market noise is the goal of every trader. Too many times, traders get head-faked by the twists and turns of price action.

In addition moving averages can be used to signal entries and exits as well. A couple of settings have to be changed in order to get the moving averages which are usually tied to time, to work with a chart system that is based on price.

To add a 13-period exponential moving average to the Renko chart, choose EMA from the Add Indicator menu then change “Number of periods” to 13.


Notice the chart above which displays both Renko bars and a 13-period exponential moving average. A simple system can be built around the Renko bars and the moving average. When Renko price bars cross below the moving average and turns red, traders can enter short and stay with the trend until the Renko bars cross back above the moving average.

An initial stop could be placed just above the last blue Renko brick. Keep in mind that in the above example, each brick is equal to five pips. In the above example, the red circles mark where the Renko bars crossed below the moving average. A trader can see that a number of pips could have been gathered as the bars stayed below the moving average.

On the other hand, when the Renko bars change color and cross above the moving average, traders can enter long placing stop just below the last red Renko brick. The above chart shows in the green circles, points were the Renko price bars moved above the moving average generating a clear buy signal.

Renko charts, without the dimension of time, may take a little getting a little used to. But once you get the hang of them, you may find it difficult to go back to the candles. Adding a moving average gives excellent signals for entry and exit. Marrying them up with other indicators can magnify the benefits of trading without noise and scary wicks!




Sergey Golubev
Moderator
101608
Sergey Golubev  

Forum on trading, automated trading systems and testing trading strategies

how to set moving average apply to ""PREVIOUS INDICATOR'S DATA"" in MT4

Sergey Golubev, 2016.08.05 06:38

1. Attach your first indicator to the chart to separate window, for example - Stochastics:


2. Find Moving Averages indicator in Navigator and move this indicator by mouse to the separate window of the chart (it will be the second indicator on that separate chart as Stochastic indicator alrady exists there)


3. And you will see 2 indicators in one separate window:



Sergey Golubev
Moderator
101608
Sergey Golubev  

EES V Speed - indicator for MetaTrader 4

"V (Volatility) Speed is an indicator that displays the current high-low (range) of each bar on the chart, and displays it in the data window below with a smoothed average of the past x(3) bars. 3 is the default, the longer the period the more long term the value, in other words if you want a short term volatility indication to signal an increase in volatility, a lower number should be used."

"EES recommends using this indicator as a measure of volatility, and to signal an increase or decrease in volatility by watching the SMA. A cross up (when the SMA is below the V Speed line and crosses above it) of the SMA indicates a decrease in volatility and conversely, a cross down indicates an increase. The SMA values can be adjusted according to the specific pair and time frame used. V Speed can be referenced by strategies as an indication of volatility."

Sergey Golubev
Moderator
101608
Sergey Golubev  

Volatility - indicator for MetaTrader 5

"A volatility indicator displays the amount of the corridor price movements for N period in points."

Sergey Golubev
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Sergey Golubev  

Forum on trading, automated trading systems and testing trading strategies

Signal Systems

Sergey Golubev, 2016.06.25 19:38

Many traders know NRTR indicator and some of us are using it in our trading systems.

What is NRTR? if I am not mistaken -  NRTR is Nick Rypock Trailing Reverse) and the theory behind it is the following (see image):


This Nick Rypock concept was invented in 2001 by Konstantin Kopyrkin ... we can read 'Nick Rypock' from back to front and we will receive ... the family name of the author of this concept :) By the way, he invented NRMA (Nick Rypoсk Moving Average).

But who was the person which invented it before Konstantin Kopyrkin? Good question. It was invented by R.Colby and T.Meyers 

Who invented it before R.Colby and T.Meyers? No idea sorry :) But it is really great concept and great indicator with many versions. One of the version is presented in Codebase here.

This indicator became a famous one many years ago when the traders and coders were using it with ASCTREND trading system - this is example of original template with this indicator (indicators are attached):


How to trade this system?

The dots are Asctrend indicator, and the lines are NRTR indicator. The rules are simple ones: open the trade according to the color of the dot filtered by NRTR indicator.

Example, if we see blue dot so we can look at the color of NRTR line: if NRTYR line is in blue color too so we can open buy trade (blue color for buy trade, and red color for sell trade).

Asctrend is very well-known and well developed trading system for MT4 and MT5. Please find some links related to this system for MT5:

ASCTREND SYSTEM

The Theory.

Manual Trading statements
Second version of this manual trading system and for now - asctrend indicator together with NRTR indicator

First version of AsctrendND EA.
Next version of AsctrendND EA (verion 1.02) with TrendStrength filter added.

Sergey Golubev
Moderator
101608
Sergey Golubev  

Multi Instrument Indicator for MetaTrader 4

This is very interesting indicator: we can add the price of one or several other instruments to one window.

This is USDCHF price on the EURUSD chart:

This is Dollar Index price on USDCAD price:


This is Dollar Index on EURUSD chart:


Sergey Golubev
Moderator
101608
Sergey Golubev  

Forum on trading, automated trading systems and testing trading strategies

Something Interesting

Sergey Golubev, 2016.05.10 17:28

There is very interesting indicator: Daily Box - indicator for MetaTrader 4:



"Indicator draws a set number of days, thus distributing the schedule for individual rectangles, other than by color and signed on the day of the week, also have the option to enable or disable additional rectangles price of opening and closing of the day, which is also distributed by color."

There is some strong theory that the market is continuing with last week's trend, and new trend may be started on Tuesday only.