Pipsqueaks #25 – Part 2: Renko Charts

Last time out we looked at how to set up a Renko chart, and this week we will utilize our Renko charts to examine some strategies. Take a look at the chart below:

renko strategy 1


On this chart we have a 25 moving average (magenta) and a 50 moving average (blue) added to our Renko chart. Let’s examine a simple strategy that calls for placing a short trade when the 25 MA is below the 50 EMA and we have two consecutive Renko bricks that close in the same direction (and visa versa for longs). On the chart above we can see a sell order entry flagged at the bottom of the second red brick (notice that the 25 EMA dropped below the 50 EMA). We will exit at the close of a brick in the opposite direction. This is flagged at the top of the green brick by the exit arrow. If we got a good entry at the open of the third bearish brick in this sequence, then we stood to gain 30 pips (not counting spread). There, wasn’t that easy?


Let’s take a look at another Renko strategy, one that should be familiar to Slick Traders:


renko strategy 2


This is one of my favorite Slick Trade strategies, the Rockin Renko. Here we have two Hull moving averages (14 and a 200), support/resistance lines, weekly ranges and, at the bottom of the chart, the Trend Lord. This particular Renko strategy gives us a number of methods regarding how we will place our trades. When we see bricks bouncing off support and resistance, coupled with filtering using Hull MA’s and the trend Lord (which will indicate buy/sell direction by color as well as whether the market is exhausted to the upside or downside, depending on the height of the bars). And for good measure we also have the semaphore indicators showing the swing highs and lows. The Hull moving averages also change color, indicating buy or sell conditions. One of my favorite ways of utilizing this strategy is to look for a change of color on the Trend Lord, coupled with price action bouncing off of support/resistance, especially when S&R matches the daily-weekly Hi-Lo indicator. You’ll also be able to utilize the Hull moving averages to filter trend directions and reversals. In this particular chart we have a pretty strong set up for a short position on the right side of the chart, with the trend Lord changing color to sell (purple), bearish Renko bricks crossed below the 200 HMA, and we have a red semaphore dot. With a good entry this trade was good for around 60 pips. This is an example of a countertrend trade, as the overall trend is upwards. So we exit that trade looking to get something going in the form of a long position. After the green semaphore dot, the Trend Lord turns green (long) price action crosses above the 200 HMA, and were good for another 60 to 80 pips if we entered just above the 200 HMA. So easy even I can understand it.


Another nicety of this strategy is that it’s fully automated with its own Expert Advisor, which you can tweak to suit your favor trading style. Just another benefit of Sapphire membership in Slick Trade. So if you have been thinking about it, why not sign up and give it a try? A great opportunity to learn Forex while getting some hands-on experience with trading, receiving trade signals, accessing expert advisors, great strategies, help and insight from other traders just like you and more! So what are you waiting for? Sign up today!


That’s all for now – next time I’m going to share my thoughts of what markets are all about. Until then good luck in the room, and, as always, thanks for reading!  JC

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