Pipsqueaks #25 – Part 1: Renko Charts

Now that I am finally finished with the black box (I ended up swapping out the fans and replaced the two $4 CPUs with two $11 CPUs, so now it’s uber quiet and sports 16 threads versus eight), it’s time to get onto something really interesting – charts! Specifically one of my favorite types of chart, the Renko chart. So what’s a Renko chart? A Renko chart is a flavor of chart that records price action irrespective of time.


Here’s what one looks like:

renko charts metatrader 4 forex 1


Here’s an ordinary candlestick chart from around the same time:

renko charts metatrader 4 forex 2

I say “around the same time” because Renko charts are not time dependent, that is they only form “bricks” (as they are called in the Renko world) as price changes. No price change, no brick formation. The intention is to filter out the “noise” we get with an ordinary candlestick chart, thereby giving a more clear indication of how the market is trending. Bricks can form in several ways, either based on the calculation of the average daily range, or, the more traditional flavor as we will be looking at here, based on a fixed Pip size. But before we get too deep in the discussion, let’s set up a Renko chart in MetaTrader 4.


MetaTrader 4 does not come with the ability to display Renko charts, so it needs a little help, typically in the form of an expert advisor that generates the Renko chart. I will be using RenkoLiveChart_4.13 as the EA in my examples, which can be readily found on the Internet (Slick Trade members will have version 3.4 included as part of the expert advisors file pack download). Simply copy the file to the “experts” folder (go to File ==> Open Data Folder, and then navigate to the MQL4 ==> Experts folder). Refresh the navigator (right-click on the navigator and choose “Refresh”) and drag the RenkoLiveChart EA onto a one-minute chart. A dialogue will pop up – pick Renko box size as “10” and RenkoTimeFrame as “2”, accept the remaining defaults and click “okay”. On USD/CHF, you’ll get something that looks like this:

renko charts metatrader 4 forex 3renko charts metatrader 4 forex 3


Having done that we now will need to open an offline chart – return to the file menu, click on File ==> Open Offline and you will see the following dialog:

renko charts metatrader 4 forex 5


since we used a timeframe of “2” we will pick the highlighted USD/CHF, M2 off-line chart and click “open”. We should get a chart that looks like this:

renko charts metatrader 4 forex 4


Just like our candlestick charts, our Renko charts will display green bullish bricks and bearish bricks are red. Depending on one’s preferences, the Renko chart can show bricks with or without wicks (I have the wicks enabled). Notice that the bearish wicks only point up and the bullish wicks only point down.


Okay, so now that we have our Renko chart up and running, so what do we do with it? One obvious  advantage to using Renko charts is that they’re very easy to read. At a glance, what can we observe from the chart above?

renko charts metatrader 4 forex 6

renko charts metatrader 4 forex 7

On the left side of the chart, we can see where price was in consolidation, and then breaks through the  resistance level to the upside, followed by a breakthrough to the downside at the same level (now support).


Okay, that’s it for part one, in part two we will look at some strategies utilizing Renko charts. Until then, take care and have a great week!


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