Practice shows that most speculators prefer to use a candlestick chart to assess the dynamics of changes in the price level. It should be noted that there are additional methods for visualizing the movement of the price level, simplifying the process of identifying patterns of price dynamics and forecasting changes in quotes in the future.
The example here is Renko Charts. Therefore, in this article, we will describe a Renko charts strategy.
Renko Street Strategy.
The described trading system is based on an alternative method of displaying price dynamics, which is called the Renko Chart. A feature of such charts is that they display candles having the same amplitude from the maximum to the minimum price. Another difference between the described graph and the classical one is that the horizontal time axis there is not linear. Because of this feature, the formation time of each Renko bar is not fixed. For this reason, the described bars may have only one shadow since their minimum or maximum price must necessarily coincide with the opening or closing price.
Advantages of Renko Strategy.
The use of Renko charts to analyze the current market situation makes it possible to most easily identify trends in the market. This is because the described charts simply do not display small jumps in the price level that occur during correction and rollback. It is worth noting that for the correct application of the charts described, it is necessary to correctly set the size of the bars. They must necessarily be larger than the market noise and potential kickbacks. At the same time, the size of the bar should be at least 4 times smaller than the estimated magnitude of the trend.
Features of the Trading System.
Renko strategy is an indicator trading system based on the following technical tools:
Renko-Street-Channel. This tool is the basis of the described trading system. Thanks to its application, it got its name. This instrument displays signals in the form of lines and circles that have red and green hues. The lines of the described instrument form a price channel. And the price rebound acts as a signal for concluding a deal. When identifying a suitable point for opening an order, the described instrument displays a red or green circle on the screen.
Renko-Street-MTF. This tool is a helper. It is displayed on the screen in the form of an information window in which you can get information about what trend is observed on the main currency pairs. Also, the data on its strength is also present there. The information of this tool allows not only to confirm the correctness of the signals received from the Renko-Street-Channel indicator but also to choose the currency pair, trading on which can be more profitable at the current moment.
Renko-Street-Trend. This tool is also a helper. As part of the described trading system, it is used to identify the direction of the trend, as well as to confirm the signals received from the Renko-Street-Channel tool.
In order not to waste time on self-optimization of the tools mentioned above, it is recommended to use a ready-made template. It can be easily found on the Internet.
It is important to understand that despite the high level of efficiency of this trading system, you should be prepared for the fact that periodically some of the positions you created will be unsuccessful. In order to assess the real level of effectiveness of the described trading system and learn to competently conclude transactions based on its rules, it is recommended to practice on a demo account.
Such an approach will allow you to avoid significant losses and maintain existing savings.