Renko Charts Indicator For MT4
Table Of Contents:
- Renko Charts Indicator For MT4
- Trading ideas with the Renko Charts Indicator For MT4
- Renko Charts Indicator For MT4 - Best strategies to use the indicator
- Renko Charts Indicator For MT4 - Buy Entries
- Renko Charts Indicator For MT4 - Sell Entries
- Renko Charts Indicator For MT4 - Conclusion
The Renko Charts Indicator For MT4 For MT4 simplified the price movement with small dots just below the candlestick. Consecutive blue dots in the Renko charts indicators the buyers are in control of this market. On the contrary, consecutive red dots indicators strong selling pressure. Based on the Renko chart you can easily trade the critical support and resistance level.
The Renko Charts Indicator For MT4 has a close resemblance to the three-line break chart. But if you closely notice the colored bricks in the chart, you will see the Signiant difference. This indicator gained its name from the Japanese word Renga which refers to brick. The Renko Charts creates two-colored brick pattern in a separate window. The bullish movement in the price has been marked by the blue colored brick and the bearish movement in the price has been marked by the red-colored brick. The algorithm for this indicator helps the retail investors to identify the short, medium, and long trends in any instrument.
Identification of the different phases of the trend by using the Renko Charts requires precise knowledge about the indicator. Being a new trader, you should not expect that you can easily predict the direction of the market just by seeing the colored bricks. The experts analyze the highs and lows of the brick to determine the market cycle. Though it’s a tough job for novice investors, we will give a precise guideline so that everyone can take advantage of this premium indicator. Read this guide very carefully as every step will be critical to ensure success in the trading profession.
Trading ideas with the Renko Charts Indicator For MT4
Those who have used Renko Charts in the past, know they need some unique method to generate the trading ideas. Deploying regular rules is not going to make you skilled in using the Renko Charts indicator. You have to study the traits of highs and lows of the market use that concept to find the trade setup zones in the Renko Charts. The highs and lows related terms can be very confusing and you need to give yourself some time. In the learning stage, stick to the demo account and learn about the important market metrics. Once the basics of trading are clear, it’s just a matter of time you get good at other important factors.
Few aggressive traders often take long at the blue brick and short the asset at the red brick. To them, Renko Charts offers trading opportunities by shifting its color. But if things were so easy, everyone would have become a millionaire by using the Renko Charts. You need to reliable trading strategy to find clear trade setups. Once you are certain about the trade signals, you need to filter the good and bad trades by using the Renko Charts data. Before you learn the details, let's see which strategy works best with this indicator.
Renko Charts Indicator For MT4 - Best strategies to use the indicator
The new investors don’t have the patience to wait for a good trade setup. The majority of the traders do not have a working strategy. After knowing the basics of a popular trading strategy, they start taking the trades with very little basic knowledge. Most of the traders are emphasizing too much on the indicators and EAs. But to ensure success at trading, a trader has to rely on a proven strategy. And then they need to work hard to integrate a premium indicator into their existing trading strategy. So, which trading strategy should you use to get the maximum benefit while using the Renko Charts? Though there are several strategies we are going to emphasize the most popular ones.
Since the Renko Charts works by changing its color at the most critical reversal point, it is better to trade the higher time frame. Analyze the chart from the 1 hour or above time frame only. For the strategy, you can go for chart pattern, trend trading, swing trading, or even the channel trading strategy. But be sure that you are comfortable with your trading method or else practice more in the demo account. Once you are comfortable, you will be using the Renko Charts just to see whether the trade signal is valid or not. Now let’s move to the core function of this premium indicator.
Renko Charts Indicator For MT4 - Buy Entries
Since the trend trading method is widely used by experts and novice traders, we will illustrate the long trade setups by using a trend trading technique. To find the long trade, you have to draw a bullish trend line in the higher time frame. Be sure that you have connected a minimum of three lows in the market to draw the bullish trend line. Wait for the fourth bounce in the trend line support zone and analyze the color of the bricks in the Renko Charts. The brick color must be blue to take the long trade.
Smart traders do not take the long order just by evaluating the color of the brick. The use of the concept of highs and lows. Since you are going to open long trade, the Renko Charts must have a recent break of the important high. This means the colored brick will make a new high in the Renko Charts. The formation of the new high acts as the confirmation signal to take the long trade. If you are not sure how to evaluate the highs lows, learn about the swing trading strategy. This should give a strong idea about the highs and lows in the market.
Renko Charts Indicator For MT4 - Sell Entries
By now you should have a pretty good idea to use the Renko Charts. However, we didn’t teach you how to evaluate the Renko bricks during the major news. In this segment, we will show the exact method by which the professional traders short the asset at the break of the support. Draw the support level in the chart and look for the presence of a strong bearish candle right at the breakout zone. During the breakout, the Renko Charts should show red-colored bricks. If the breakout bar offers you decent SL to take the short trade, you can take the short trade right at that moment.
At times, it becomes a tough job for the retail investors to determine the SL price after the break of major support. In such a case, they need to wait for the bullish pullback in the price. If the correction takes place, you will notice the price will slowly rally towards the broken support level which will act as a strong resistance level. The color of the bricks in the Renko Charts will be blue since the price is in the bullish correction mode. Right after the test of the broken support or the critical resistance, you will see the price is dropping sharply. Wait for a single red brick in the Renko Charts to execute the short trade.
Renko Charts Indicator For MT4 - Conclusion
Successful traders do not want to deal with a complex trading system. The Renko Charts indicator indeed seems like a very simple tool but if you use the concept of the highs and lows, the chart will convey a very important message regarding the state of the asset. Use the above tips to take the confirmation from the Renko Charts. Some of you might forget the fact, the indicator requires a higher time frame to function properly. So, never try to use the Renko chart with a lower time frame trading method unless you know the price action trading strategy.
As you start making a consistent profit, you will face some problems with the high impact news. There are two ways to deal with such problems. Either you can take the trade when the market is in a stable state. This means, there should be no high-impact news release in the next few hours. The second step is a bit more advanced and it requires knowledge of fundamental analysis. Blend technical and fundamental data so that you can trade the news with confidence by using the Renko Charts.