Renko 10

Trading Systems Free Forex Trading Systems
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I had originally thought this was one where you would have to watch the screen, but I have thought of some ways it can be used as a “set and forget” method. There is a lot of information about Renkos on this site. You might start there and see if there is interest for you. If so, proceed to get your charts set up. We will be exploring several ways to trade Renkos.

I will put this out there in multiple posts. That will be more convenient for me and give anyone interested a bit of space to take it in. For the benefit of those who don’t know how to create a Renko chart, I will cover that in a subsequent post. Those of you who do know Renko can just skip that one.

My motives are pretty much the same as always. I owe someone for a lot of help along the way and want to appreciate his support by trying to give something back. That’s the noble, altruistic side of me. From the selfish, all about me side, I also want feedback from many of you I see on the site who are just so much better, smarter, and more experienced than me. Tell me what you see, tell me why you think it will, won’t, or might work.

I’ll start by throwing in some reservations here. I have been fooling around with Renkos for only a couple of months. I have no backtesting, not sure I would know how to do it, and my offering the method is based strictly on observations. Caveat emptor. As always, make your own observations, do your own testing, practice on demo. I have been trading a live account, very small, for that couple of months and am satisfied with what I am getting. I will go into my goals with this method later. That is one of my “experimental” accounts and I will need to clean it up from multiple methods, leaving only the Renko 10, so that I can post results to myfxbook, assuming there is interest. Of course, I will appreciate your sharing what you get with it also.

In brief, the main objective of a Renko chart is to reduce noise. It attempts to do this by operating on price movement rather than time. There is no such thing as an m5 or h1 Renko chart. A bar is printed only when price movement covers the number of pips we have specified in our setup instructions. So, if we specify a 10 pip Renko chart, a bar will print when price moves either up or down 10 pips. That may take seconds or hours. Several bars may appear in quick succession if price moves dramatically in a short period of time. Or, there may literally be hours between prints while price languishes, barely moving in a tight range. We need to be sure we understand the difference between time-based charts and price-based charts. With Renko, the bar will not print, the chart will not advance on any factor of time. It will print and advance only when our Renko range has been met by price movement.

Looking at a Renko chart you will see discreet boxes covering a fixed range. On an up bar, the open and the low will be the same and the close and the high will be the same. On a down bar, the open and the high will be the same and the close and the low will be the same. An up bar on a 10 pip Renko chart might show something like an open/low of 1.3680 and a close/high of 1.3690. If the next bar also finishes up, it would show an open/low of 1.3690, i.e., starting right where the previous bar left off, and a close/high of 1.3700. Note that there are several things you will not see on a Renko chart: candles, variable size candles, candlestick patterns, wicks, etc.

So, what is the advantage of a Renko chart? Does it offer any edge over the market? Like any other indicator, candle, template, prism, or whatever we might look through, it only changes our perception of fixed price data. These are all just numbers that we package in various ways to try to help our human eyes absorb a picture that will get us to a decision. No magic, no amazing, no 100% winners. Just a little bit different way of looking at things.

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Very interested in this. Nice & clean too. Could you tell me where & how I can get hold of renko charts?

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Tyrone, I noted your interest in Renko on another thread and hoped I would see you here. Glad to have you. I will be posting further later today. We will hope to get some interest and support from some of the accomplished traders on this site.

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have been looking around for the (free) renko indi that works with new MT4 (build 6xx); nothing yet.
So as Mr. Tyrone Archer suggests, it would be very useful if the indi is available so that there will actually be a topic for discussion.

cheers

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I’ve been having problems posting lately, so let me see if we can get these two indi’s and a template to show up. If so, I’ll explain in another post.[B]

[/B]

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Joseph Nemeth (youtube) married renko with heiken ashi :slight_smile:

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Okay, looks like we got 'em on the board.

Most of you probably know more about Renkos than I do, but I am covering this for those who know even less. I can share what I understand about Renkos and invite more experience to weigh in any time.

A Renko is a conversion chart. It takes time-based data and converts it to price-based. A few trading platforms actually have a Renko option. Just like you might select m5 or h1, you can choose Renko and there you have it. Mt4 is not one of those platforms. So, we have to implement a conversion process. Trust me, this is less complicated than it may initially appear and after you’ve done it a time or two it will be a “piece of pie,” grandma.

The process I am familiar with uses either an ea or an indicator to convert the chart. I prefer using an indi to avoid the possibility of any interference from the Renko ea with others I might have running in the account. In the post above, you will find two indi’s and a template. Each indicator does something different and the template is just to get you a chart with wide bars in blue and red. I actually use an indicator I purchased and would not feel right about sharing it here unless someone can find a forum, code source, etc., where it has been released for free. The one I am using is RenkoLiveChart_v2.1. If you come across that offered somewhere, let me know. I’ll be happy to access it and post it here. However, as far as I can tell, the second indicator above, RenkoLiveChart seems to do exactly what mine does. In fact, there may also be newer versions of the same software available for free somewhere.

The first indi above, RENKO 2, creates a Renko chart in a separate window. I find this a little difficult to manage, but you can take a look and see what you prefer. One thing I don’t especially like about this one is that your data window is referencing the main chart. If your main window is Renko, then the data window reference is to Renko data. That is what I prefer and if you use the second indi, your chart should look like mine.

Start by opening an m1 chart on your platform. I will be covering mostly the eur/usd because I get a spread under 2, but I think any low-spread pair would be suitable. I also like gbp/usd and get a spread around 2 1/2. Depending on how you decide to use this method, the spread could be an important issue. For following along purposes, let’s say you just opened an m1 eur/usd and you want to use the RenkoLiveChart indicator.

Next, attach the indicator to your m1 chart. You should get a window that allows you to select box size, box offset, and time frame. There is also a choice for “strange symbol name.” Presumably, this is to accommodate those brokers who add a following symbol after eur/usd, like eur/usdm or eur/usdecn. I have attached this indi to three or four platforms and not had a problem leaving that choice false. The box offset you want is 0 and the time frame is 2. In other words, you will not use any offset for your bars and you will want your Renko chart to show up as eur/usd, m2. I’ll explain that in a moment.

For box size, you will be tempted to put 10 or 20. If you are using a five-digit broker, which most of us are these days, you will need to put 100 or 200 because these are seen by the indi as points, not pips. So, if you choose a box size of 100, you are asking for a Renko chart that prints a bar when price moves a full ten pips. When you get your Renko chart, check your bar high to low, open to close, and see that you get a range of 10.

Finally, you have opened your m1 chart, made your selections, and attached your indi. So, where’s your Renko? You should have a message in the upper left corner that says, “RenkoLiveChart(100): Open Offline EUR/USD,m2 to view chart.” From your platform, upper left corner, select “file.” The second choice on the window that opens is “open offline.” When you make that choice, you will get a long list of charts and timeframes. Scroll the alphabetical list until you find eur/usd,m2. That is the reference you told the indicator to use in building your Renko chart. Opening that chart will give you your Renko. It will be all green and bar charts. To get the wide bars and red and green, attach the template.

That should get you set up and you will have Renko charts that we can look at together. Next, we will start looking into whether these charts can help us with our trading.

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Tested, not working (MT4, build 625)

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Etfak, we need to figure out what’s wrong because I have both indi’s running on an ibfx demo, build 625. When you say it isn’t working, do you mean you can’t attach it to a chart?

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These are zip files. BP won’t let us post an unzipped indi. Step one is to unzip. Once unzipped, copy the indi. On build 625, go to file in the upper left corner of the platform. Then, go to “open data folder.” From the list, open MQL4. You will have another list that includes experts, files, images, include, INDICATORS. Open indicators. Paste the copied indi there. Close down the platform, reopen. If that doesn’t help, we’ll have to get someone else involved.

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Here is another little trick you might need to know. When you open your m1 eur/usd chart and before you attach the indicator, turn off the automatic scroll and scroll back as far as you can. For example, my ibfx 1 minute data goes back to the first week in February. I’m not exactly sure what that does, but it seems to let the indi “see” the data and it will give you a larger data set on the Renko chart. If you don’t do that scroll back, you might get only six or eight Renko bars.

Also, you have to leave both charts open to continue data feed. As long as both the m1 and Renko are open, they will both advance with the continuing feed. The regular chart, of course, will advance on time and the Renko on price. But, in the Renko, you will be able to see price movements.

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This appears to be a later version of the indi I am using. Seems to work okay. On this one, the box size can be stated as two digits.

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Here are three versions of a Renko indicator that is just too cool! It attaches to a regular time chart, probably an m5 or 15 would be best, and actually draws the Renkos as price progresses. In the attached picture, I have drawn horizontal lines at all the 10 pip numbers, i.e., 1.3790, 1.3800, etc., and you can see how the “shade” fills the box. By selecting “wicks,” we can also see how price traveled around the Renko parameters. Excellent work!

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I’ll start by saying I have minimal knowledge of Renko, only what you’ve just now explained pipwoof. I haven’t looked at the actual indicators myself, but with the exception of the last one (renko shade, and it will hopefully be evident why) I have some concerns about it.
Great posts as usual pipwoof!

I guess you would say that the standard chart presents a fixed time with variable price, whereas Renkos present a fixed price and a variable time. Same thing, different viewpoint. This is a very elementary thought, but it seems to me that the point of the basic chart is to predict price; there’s no use in predicting time because it’s within the chart. Could you say the same would be analogous to the Renko chart, in which the point becomes to predict time, not price? The obvious issue being that you don’t make money off of time (unless you trade options or futures). Yet time is one of the most crucial indicators of them all! Built within time are measures of volatility and magnitude, other important elements of trading. To ignore time, or to make it difficult to see on the chart, seems like a deathtrap.

I know this thread is just getting started, so I’ll sit back a bit and wait for the rest of it. Being new to Renko, I’m interested to see what kind of strategies and ideas you plan to use with Renkos. Seems to me a bit like playing Fischer random where your opening lines disappear, and only the core theory remains (although hopefully not as extreme)

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Genius, I do appreciate the thoughtful insight and hope you can continue to share your perspectives here for a while. I avoid being a “true believer” when it comes to anything having to do with trading. I even find myself a little resentful of those who pick out their special pony and act like he’s the only ride in town. Being new to Renko myself, I am still exploring with the most preliminary of hopeful signs. But, I am always willing to walk away from something that proves ineffective.

As we all know, so much of this trading business is personal and what helps one trader destroys another. Reviewing opinions about Renko across the web, we find the usual extremes from those who swear by 'em and those who swear at 'em. I am content at this point to say I am curious and exploring and will certainly continue to appreciate anyone offering considered input.

Your points on time and price are particularly worth noting and I was struck by your conclusion: “Same thing, different viewpoint.” That describes exactly where I am with Renko at this time. It provides a way of looking at the pair, primarily a reduction of noise and a consolidation of price movement within a fixed range. The open question is whether that unique view we create with a Renko will be helpful to some of us.

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Well, we seem to have a handful of contributors and a few hundred viewers. That’s okay, I know what they’re waiting for. I’m not saying this is a bad thing, but there are thread searchers who are looking for a bottom line. Frankly, I am often one of them. We either cannot or will not contribute to an exploratory process and are only looking for something that already boasts a positive outcome. We will especially look into anything that starts with, “100 pips a day,” and are susceptible to marketing pitches that offer “buy/sell arrows.” There is one poster in particular on this site whose persistent question is, “How are you doing with this method”, “What are your results?”, “Are you making money with this?” She is not the only one looking for a tidy little system, an ea all pre-packaged and ready for use. Understand, we are not bad people because of this and I don’t fault her, others, or myself in the least. Oh, how I would love for someone to put something like that together for me. Something tangible, understandable, convincing, predictable, and consistently profitable. Also, affordable or, better yet, free! Oh, yessssss…

From the tentative nature of my first post, you should know that this is a thread with more questions than answers. I am a Renko newbie myself. By posting, testing, hearing from others, and continuing to search, I expect to arrive at a point where I can decide whether this is useful for me or not. Honestly, I enjoy this process. Over the years, the search has been one of my attractions to trading. Even when we have a few methods that are meeting our expectations, wouldn’t we want to continue looking into things just for the fun and challenge of it? Well, I would anyway.

More philosophy later. At this juncture, I will assume that anyone interested in participating in this quest has been able to build their Renko charts and is able to follow along. If you will, I would like to give you a little homework assignment that should provide you a bit more experience with Renko and help me by confirming some initial observations.

Look at the two charts pictured in the first post. For clarity, I made two charts, but they do overlap a few bars. You should be able to sort out the overlap by looking at the vertical lines and seeing which bars are in both charts. Starting with that first red bar on the far left of the first chart that you can see half of and not including overlapping bars, count the bars.

This is, of course, a small sample, but I think we will find it is representative of overall Renko activity on the eur/usd. You might note that this little sample covers a time span from 3/19/14 19:03 through 3/25/14 1:48. I did select this segment purposely because the first chart has that unfortunate sawtooth or dentil pattern, i.e., tight trading range that causes losses to almost any method other than a quick scalp. Both the first chart and the second also show intermediate-term trends. On chart one, you will see a collection of eight red bars and chart two has a run of ten blue bars.

After you get your count of total bars, do this. Count how many bars are followed by a bar of the same color and how many bars are NOT followed by a bar of the same color. Looking at that far left bar we can see half of, it is red. It is followed by a blue bar, so it would count as a NOT. The next bar is blue and it is followed by another blue bar, so it would be a YES. That third bar is followed by another red, so it is a NOT. Starting with the fourth bar, we then have seven red bars, which means that six bars were followed by bars of the same color. Count 'em up and I’ll get back on here, probably tomorrow, so we can talk about our results and what they might mean. Hopefully, a few of these exercises will be stepping stones into determining the usefulness of this tool. Thanks.

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We’re just using the 2 pictures in the first post as the assignment? I was never the bright one in school…

I broke it up into 5 for ease of reading:
NOT, YES, NOT, YES, YES,
YES, YES, YES, YES, YES,
NOT, YES, YES, NOT, NOT,
YES, NOT, NOT, NOT, NOT,
YES, YES (VERT LINE) NOT, YES, YES,
YES, YES, NOT, YES, YES,
YES, YES, YES, YES, YES,
YES, YES, NOT, YES, YES

Some basic stats because why not?
Total bars: 40
yes bars: 28 (70%)
Not bars: 12 (12%)
Probability of a bar being followed by another bar of the same type (61.5%, not statistically significant)

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Genius, for someone claiming to not be the bright one, you pretty much nailed it! I appreciate the work. Yes, there were 40 bars where we could see the next bar. Twelve times the next bar was a different color (12/40=30%) and 28 times (70%) it was the same color. Stat significance isn’t going to come with an n of 40, but let’s continue our anecdotal observations. Since 40 bars was about the span I could get on the site with two charts, let’s just look back at the previous 40 before our current sample. That segment starts 3-14-14 5:50 and runs through 3-19-14 8:49. It looks pretty choppy with colors running one way and another. When I count, though, I get 11 bars that aren’t followed by a bar of the same color and 28 that are. Hmmmm… Those numbers look familiar. Well, let me look back another frame, 3-7-14 13:30 through 3-14-14 5:50. Twelve bars are followed by a different color bar, 27 bars are followed by a bar of the same color.

I might enjoy claiming credit for this profound and interesting discovery. Alas, it is nothing new since there are a number of published counts showing, on average, the 30/70% ratio holds up over time. What I can’t find much of is what to do about that, if anything.

As a preview of things to come, I believe there is an implied, albeit unproven advantage in those percentages. I will talk more about Roulette later, but, if this were simply a casino Roulette wheel and I had reasonable confidence that 70% of the time color would be followed by color, I would bet at that wheel as long as they would let me. Forex is not Roulette, however, and I sense that our challenge will be to figure out how to stay in the trade at reasonable cost until the advantage plays out. This may get down to r/r. It doesn’t matter if I am winning 70% of the time if my losses are twice my winnings.

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Interesting results indeed. I guess I will be the one to bite and ask the obvious question is: What’s the issue with simply trading every bar in it’s current direction? By nature of the Renko bar, wouldn’t you be presented with a 1:1 RR w/ a 70% win ratio?

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Genius, I don’t want you to feel that you are “biting.” I fear that I am an incurable (perhaps incorrigible) teacher with a pattern of wanting to recreate my thinking process in pieces as I move from one plateau to another. My assumption is that it makes it easier for someone to follow and we have a better chance of sharing the end perspective. In that, I mean no disrespect. Contrarily, I believe your question is evidence that you are “getting it” very quickly and are looking at it the way I was a short time ago. I am also painfully aware of my intellectual limitations and know that most of you will not only “get it,” but you will “put it” ahead of me before long and, if there is anything to learn here, I will be learning it from you.

Lately, it looks like you and I are the only ones conversing, but I see a few hundred visitors who may be sticking their heads in from time to time to see if we come up with anything. We may not. We may end up contributing to the vast graveyard of trading ideas that don’t work. At least we will know one more thing NOT to do.

Thanks for your participation. I do hope it will end up being worth your time in some way. I have some time this morning, so will start a post about Roulette.