Just a few days back I started using Renko charts for high frequency scalping.
I have 1-pip renko boxes and use breakouts/bounces from SnR levels and patterns to trade.
I have attached the Renko indicator onto a 1-min Eurusd chart and correctly setup my offline renkos.
I have turned on ‘wicks’ because i like to trade retracements and wicks allow for better backtesting.
But during forward testing I discovered the Chart actually repaints. I do not mean the current box… The history also repaints.
Is this normal for renko bars? (I don’t think so)
Below is today’s EurUsd chart and I have put arrows at abnormally long wicks. These wicks are around 3-4 pips long. This means price traveled down 4 pips and moved up 6 pips to form the green Renko brick. Shouldn’t the 4pip down movement be shown as 4 red bricks followed by greens when the price comes back up?
Could this be because I have labeled the chart as M3 instead of M2??
I named it M3 because I already have a 10 pip Renko chart named as M2.
NOTE: When I was trading live, the bricks were forming normal. Means those wicks were normal bars. But after some time I saw the Brick suddenly changed into long wicks. I saw it happen.
See the long series of red bricks on the left? Those formed after the CPI and unemployment rate came out today. In that series were a few random green and red ones when the price stalled and moved a few pips up-down. But soon even those green bricks were gone. Now the pic seems like price moved down without stalling or retracing even 2 pips (but it did). There are no wicks even!
REPEAT: Although this does NOT affect trading in real time, it is still disturbing when some highs/lows missing from history.
UPDATE:
I understand now…
After going back on the chart I see each and every one of those absurd wicks is exactly as long as the following downward move. In short… they mean nothing.
Was a problem with the indicator logic… went to the code and changed it, easy fix.
I did not find any trouble with live trading using Renko charts. I just wanted to figure out why the history repaints and why those wicks form. They don’t matter during trading though.
From my experience Renko should not be used as a stand-alone system. This means that you should have a good system in place. I have found out that if something works fairly on candlestick charts it should work marginally better on Renko (except price action).
