What is a Renko Chart?

Understanding Renko Charts

Renko charts filter out time and focus solely on price movement. Bricks of equal size are added only when price moves a predefined amount, creating a clean view of trend direction and eliminating much of the noise seen on candlestick charts.

Why Traders Use Renko

• Trend clarity: Bricks stack neatly, highlighting higher highs or lower lows without intraday clutter.
• Support/resistance: Horizontal brick clusters reveal levels with minimal ambiguity.
• Breakout confirmation: A series of bricks past a level can signal momentum more clearly than choppy candles.

Setting Brick Size

Choose brick size using ATR, volatility measures, or fixed pip values. Smaller bricks capture detail but introduce noise; larger bricks smooth fluctuations and focus on major moves. Adjust size to match the timeframe and volatility of the instrument.

Limitations

Because time is ignored, Renko can lag during fast markets or surprise events. Some platforms recalculate historical bricks, making backtests unrealistic. Validate strategies with forward testing and ensure your software keeps brick history consistent.

Advanced Guidance

Build a repeatable, rules‑based process so decisions are consistent across sessions and instruments. Start from context (higher‑timeframe structure, positioning, macro tone), then define precise triggers and invalidation on execution charts. Track spread and depth so your order type matches conditions. Pre‑compute scenarios (breakout, fakeout, mean‑revert) and map actions for each to reduce hesitation.

Execution Framework

• Plan entries at levels with confluence (structure, momentum, time‑of‑day).
• Place stops beyond the logical invalidation, not arbitrary distances.
• Target at least 2–3R; scale out methodically and trail remainder.
• Avoid thin liquidity windows unless the setup explicitly requires it.
• Record slippage and spreads; poor fills can erase edge.

Review Loop

• Journal setups by session and pair to learn where they excel.
• Tag trades by catalyst (news, trend continuation, range breakout).
• Recalculate expectancy monthly; prune underperforming variants.

Risk Controls

Keep daily loss limits, reduce size after consecutive losses, and pause during regime shifts. Survival enables compounding; treat discipline and execution quality as part of your edge.