If you are an intraday trader and want to make smaller profits by keeping your trades open over short periods of time, you might look for some easy and profitable trading strategies.
However, conventional line, bar and candlestick charts seem to be old and inefficient.
Renko systems are simple yet effective tools that eliminate the time element and focus only on the effect of price on the trend.
When you are trading the markets actively, it is quite important to clear out market noises and the Renko trading strategies do that by providing you an effective way to view the price action as it is time-independent.
In this post, we learn more about easy Renko systems and discuss the best Renko trading strategies.
Easy & Simple Renko Systems – A Complete Guide
Renko systems are designed to help you make money in trading through simple strategies.
However, the systems, like any other, are susceptible to losses.
What makes them so popular is the high odds of success with the addition of some rules.
The first rule is that the traders should act quickly when trading the signals using Renko systems.
They should also know about the concept of divergence. Moreover, the system involves trading on smaller box sizes.
Consider a simple, profitable strategy that only focuses on the bricks and requires no technical tools.
A powerful Renko chart pattern with wicks involves considering two consecutive bricks in the same color, both having wicks.
The position of the Renko pattern is not important here.
It can be either at the middle or the end of the trend.
However, the pattern has a high success rate if traded right.
You simply view the chart pattern between the two bricks and ensure that the blocks are in the same direction within the range.
The Renko chart following this rule is an ideal setup to take the signal.
You can easily identify the entry point and the stop loss value.
Here are some of the other simple yet effective Renko trading strategies.
Renko Ichimoku Strategy
The Renko Ichimoku strategy is a highly profitable and simple trading method.
The indicators used in this strategy are readily available with trading packages or can be downloaded from the internet.
The Renko chart is plotted using the Ichimoku indicators and the method allows the trader to follow the trend easily.
Ichimoku is a method that combines a series of moving averages which, when plotted on a Renko chart, can help the trader quickly determine the position of the market.
This method has five components calculated in different ways to represent the support and resistance in a trend.
These components are efficient enough to help traders use long term scalping strategies.
Prices above these indicators denote long entries while short entries are shown by prices falling below these indicator levels.
The Renko bars on the chart clearly point out the places for adding positions.
The simplicity of the method makes it possible to have numerous charts open at a time to allow trading multiple currency pairs simultaneously.
Mean Renko Strategy
The mean Renko strategy is a simple trading strategy used with mean Renko charts.
Its success lies on the fact that trends can be visualized easily with the help of these charts.
This method is also a short term scalping strategy and the trader need not focus on the long term.
When the signals are created, one can enter and exit the markets with profits.
A mean Renko chart is plotted differently as compared to a standard one.
With a standard chart, the prices closely track the real closing prices.
However, the mean Renko chart plots the bricks in a different fashion.
If the brick size is 5 pips, the standard chart plots a new brick whenever the price moves 5 pips lower or higher.
But a mean chart plots new bricks when the price moves 2.5 pips higher from the previous close.
On To Our Readers
Renko systems with the use of Renko Charts can add tremendous value to traders by removing the time element, and focussing entirely on the price isolating the trend.
Time can keep moving without any brick movement, if the close price hasn’t crossed the brick-size.
The key benefit of the Renko system is that it eliminates noise from the market, making it easier for traders to identify trends.
If you take the time to get used to this, there is absolutely no going back!
This model is also better suited for swing traders, and not day traders or scalpers.
Presently, there are 100s of guides, strategies, books and tools that can help you gain a better understanding of Renko, the learning curve is surely steep, but quite rewarding once you get a hang of it.
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