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Understanding the Renko Bricks (Educational Article)Today we are going to study a chart which is called a Renko chart. Renko chart is a chart which is typically used to study price movement. I use Renko chart many times to determine supports and resistnace. I find it easy and accurate way of determining supports and resistances. The word Renko is derived from Japanese word renga. Renga means brick. As you can see in the chart below it shows a kind of Brick formation. The brick size is determined wither by the user and mostly it depends of typical average movement on the stock historically. A new brick is formed once the price moves upwards on downwards in the same proportion or ratio of the typical brick. New brick is only added post the price moves in that particular proportion. A new brick might not be added in months if the price movement is not as per the ratio. At the same time a new brick might be added in a day or few bricks in a week is price moves accordingly. We will try to understand this concept further by looking at the chart in the post. We have used the chart of Reliance industries to understand this concept and concept only. Please do not consider this buy or sell call for the stock. As you can see in the above chart I have used a combination of RSI, EMA (50 and 200 days) and Bollinger band strategy. RSI support for Reliance is at 35.89 with current RSI at 40.13. Bollinger band suggests that support might be round the corner for the stock. The peaks from previous tops are used to find out further supports and resistances. Mid Bollinger band level and Bollinger band top level coincide with other pervious tops making them tough resistance when the price moves upwards. Mother line EMA is a resistance now and Father line EMA support is far away. All these factors indicate the support zones for the stock to be around 2736, 2657, 2601 and 2561 in the near term. Resistance for Reliance seem to be at 2814, 2972, 3006, 3048 and 3202 levels. Let me give a disclaimer again. The above data is for analysis purpose and to understand Bollinger band, RSI, effect of EMA and Renko Bricks only. Please do not trade based on the information provided here as it is just for understanding Renko charts. Disclaimer: There is a chance of biases including confirmation bias, information bias, halo effect and anchoring bias in this write-up. Investment in stocks, derivatives and mutual funds is subject to market risk please consult your investment advisor before taking financial decisions. The data, chart or any other information provided above is for the purpose of analysis and is purely educational in nature. They are not recommendations of any kind. We will not be responsible for Profit or loss due to descision taken based on this article. The names of the stocks or index levels mentioned if any in the article are for the purpose of education and analysis only. Purpose of this article is educational. Please do not consider this as a recommendation of any sorts.

RSI: A simple method to trade trends and ranges I write this tiny article to share the basics or my use of ths RSI indicator, coupled to supports and resistances levels, as well as trend lines (or any indicator you want to use as SUP/RES (moving averages, vwap ...)) This use implies a bit of practice in spotting divergences, but let's be honest, many of them appear on previous supports or resistances, just look at these levels and you can be sure you'll find them if a reversal is about to occur.) The second specificity is the use of a moving average applied to the RSI (in my exmaple, a 50 periods EMA) I developped my own RSI+MovingAverage script, but I'm sure you can find similar scripts that have already been shared within the community, thats why I don't publish it for now. Anyway, feel free to ask if you're interested in my script, it's obviously free. Lets consider two different contexts: Trends (Bullish/Bearish) Ranges In trends , there are two things to take into consideration. Let's explain what we need to work on a bullish trend: - If the price is on an interesting level (moving average, trend line, support), you can try to long upon the RSI crosses its moving average, indicating the potential end of the current retracement (even better if a bullish divergence appears close to this price) - If the price gets close to a resistance, and moreover if a bearish divergence appears on the RSI, you can consider it as a good exit price, or wait for the next retracement in order to pyramide your trade (depending on your approach). In a bearish trend, you obviously need to do the exact opposite, wait for retracements (flags or other), and find bearish divergences OR sell when the RSI is clearly crossing down its moving average. Of course you can wait for the RSI crossing above/under its moving average to get another confirmation that the movement is starting. You can see a few examples on the following screen In ranges , it's even simpler. Once you found your support and resistance levels (it can be old levels that have already generated good reactions) all you need is to spot bearish divergences on the resistance, and bullish divergence on the support. I personally like to cut at least a part of my position when we reach 50% of the range, which can be often considered as a support/resistance. It's totally up to you to exit on this point or not, depending on your preferences (simple scalping, anticipations of a range breakout to make a new trend, lower timeframe trend following, etc...) Range example: Additional notes When you trade a divergence, try to always open your position when the RSI rebounds on the divergence line, and not after, remember that opportunities are everywhere, don't mind if you missed the last one, don't enter too late in a movement. Even if a range is a global horizontal movement, it's still composed of alternations of bullish and bearish movements between the same supports and resistances, therefore, you're of course able to trade it as trends on lower timeframes Don't forget to look at candles, which can also give you strong signals on important levels, on current or lower/higher timeframes. The price is always the key Of course, think about the DOW theory.

How to find the right price SUPPORTS and RESISTANCES Price breakout happens! Now what? As we all know supports and resistances are the key levels where the price stops, turns or does some floating before making the next big move. Usually, the challenge is to find the right ones where those kind of events will happen. You can see clearly from the graph that there are some key indications to take into consideration and so you can find the relevant ones: - Previous highs/lows - Fibonacci levels - Highest volumes As we all know previous resistance becomes the next support. btw: What would you say the next short term BTC support and resistance are? Follow me and click like if you would like to see more educational posts like this. You can find some of them in the links to related ideas bellow this post. I will proceed with educational material if I happen to find that it has enough interest from the crowd. Take care and hope you can make more educated guesses with the help of great technical analysis. "Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime."