Is Renko charting ideal for you?

For those who are completely new to Renko charting, this question would be a very legitimate question to ponder on. Perhaps one of the reasons why a trader would ask such as question might have to do with the general skepticism that comes with day trading forex. While candlesticks, lines and bar charts usually rule the roost when it comes to trading systems, it is a well known fact that most of the trading systems that are available out there, free and paid usually tend to fizzle out. The most frequent reason as to why this happens is often blamed on the trader failing to follow the rules, and in some cases, the price itself has to be blamed.

No matter the reasons, if you are considering using Renko charts, then it well worth to ask the question if Renko charting is any good.

To answer this question, the reader should know about Renko charts in the first place. The following points below should help the reader get some basic insights into Renko charting.

• Renko charts use only one variable which is price
• Unlike other conventional charting methods, Renko charts do not use the time factor or the x-axis
• Based on the box size of the Renko chart, traders can either trade the long term or the short term
• Just as switching lower time frames helps traders to time their entries, the same goes with Renko charts, by switching the Renko box size
• A new Renko brick is plotted only when price closes higher by “x” pips above the previous close
• Traditional analysis methods such as chart patterns, Elliott wave analysis can be applied to Renko charting
• Support resistance and trends are more visible than any other charting methods

Is Renko charting right for you?

The answer to this question could easily vary from one trader to another. If you are the impatient kind, then Renko charting might not be the ideal way to trade. On the other hand, if patience is something you can handle, Renko charting could be a good supplement to your trading approach.

Good at identifying support/resistance levels or buying pullbacks? Renko charting might be just the option for you to consider. If you have good enough experience trading with trend lines, support/resistance levels, Renko charting could well be able to help you to trade better. Renko charts price action trading offers a great way to trade as well as practice trading with trend lines, support/resistance lines and other forms of price action trading.

Why do some traders believe Renko charting is not ideal?

There are quite a few articles that disapprove of Renko charting. But if you consider, for every trading system, concept there are an equal if not less amount of literature that tend to disapprove the method or concept. To illustrate this, haven’t we all come across a good number of articles that tend to dismiss Elliott waves? Or that commonly referred to joke of putting 5 Ellioticians in a room to result in 5 different Elliott wave counts? The same goes with Renko charting as well. So why would one consider Renko charting to be a waste of time? It’s probably because they just don’t know how to use Renko charts.

So before you form an opinion about Renko charting, a word of advice would be for the reader to at least attempt to trade with Renko charts. There are many Renko trading strategies on our website here, which you can put to use and see and judge for yourself if Renko charting is any good to you or not.

About the Author:

Ranga, is a full time forex trader and a blogger at http://renkotraders.com and trades specifically using Renko charts. He is well experienced and brings his mix of technical analysis including both price action as well as indicators based trading applied to Renko charts.