How to set Renko Charts in MT4 in Hindi-Urdu | Best Strategy |AUKFX

How To Set Renko Charts in MT4

DESCRIPTION.

RENKO CHARTS:

A Renko chart is a Japanese-developed type of chart that uses price movement rather than both price and standardized time intervals as most charts. It is believed to be named after the Japanese word for bricks, "Renga," because the chart looks like a series of bricks. When the price moves a specified price amount, a new brick is created. Each block is positioned to the previous brick at an angle of 45 degrees (up or down). A brick up is usually white or green, while a brick down is usually black or red.

HOW IT WORKS:

Renko charts are designed to filter out minor price movements so that traders can focus on important trends more easily. While this makes it much easier to spot trends, the downside is that some price information is lost due to Renko charts ' simple brick construction. The first step in building a Renko chart is to select the size of the box that represents the extent of the price movement. For example, a stock can have a box size of $0.25 or a currency can have a box size of 50 pips. A Renko chart is then built by placing a brick in the next column once the price exceeds the previous brick's top or bottom by the amount of the box size. Assume that the stock is trading at $10 and has a box size of $0.25. A new brick will be drawn if the price moves up to $10.25. The brick will be drawn only when the price is $10.25 or higher. A new brick will not be drawn if the price only reaches $10.24. Once a brick has been drawn, it is not removed. If the price rises to or above $10.50. Renko charts show a time axis, but there are no fixed time intervals. One brick could take months to form, while several bricks could form in one day. This varies from candlestick or bar charts in which a new candle / bar is formed at specific times.

HOW TO TRADE ON RENKO CHARTS:

The chart shows a strong uptrend in a $2 box size stock. Boxes are drawn on the basis of price closures, so highs and lows are ignored, as well as moves of less than $2. There's a short pullback, marked by a red box, but the green boxes reappear. This could be used as an opportunity to enter long, given the strong uptrend. If another red (down) box forms, consider an exit. A strong downtrend forms after the uptrend. To enter short, a similar tactic could be used. Wait for a green (up) box marked pullback. When a red (down) brick forms, enter a short position, as the price may fall again in line with the long-term downward trend. Exit when there is a brick up. 

RENKO CHARTS VS HEIKIN ASHI:

Heikin Ashi charts, which have also been developed in Japan, can look similar to Renko charts in that they both show long periods of boxes up or down that highlight the trend. While Renko charts use a fixed box amount, Heikin Ashi charts take the open, high, low and close average for the current and previous time period. The size of each box or candle is therefore different and the average price is reflected. Heikin Ashi charts are useful to highlight trends just like Renko charts.

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