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Renko

Unusual Way of Using Usual IndicatorsDear friends, Today, in my training article, I’d like to share the idea of my experiment that I’m going to start with this post. I’ll explain in short its gist. Technical analysis applies numerous indicators; but their use is mostly limited by usual price charts that change along the time axis. The most common example is Japanese candlestick chart. (candlestick chart) As you see from the chart above, irrespective of whether there are any changes on the price axis, the chart will still paint the next bar and move one step forward, according to the set timeframe. However, there are many other ways of indicating how the price changes, which do not so much depend on the time axis. One of the examples is a Renko chart. Renko looks like a series of little boxes. Each next box appears only if the price changes by a certain value. Therefore, if the price doesn’t change for a long time, Renko chart doesn’t move as well, and so, its dynamics doesn’t depend on the time movement, like in the candlestick chart. To my surprise, many traders unjustly ignore Renko chart and seldom use it in technical analysis. Moreover, I hardly ever see its application together with any other indicators. Yes, I admit that indicators, analyzing trading volume, don’t suit Renko chart. But there many other indicators, based on common and exponential moving averages, which analyze only simple average of the price that can be calculated by any type of chart. In addition to Renko chart, other charts, that don’t depend on the time axis, include Linear Break Chart, Kagi, Tic Tac Toe Chart, Range. The examples of these chart-types are below: (Linear Break chart) (Kagi) (Tic Tac Toe Chart) (Range) Few traders know about these charts, and even fewer apply them in technical analysis, and, perhaps, hardly anybody has tried to apply common indicators to them. That is what my experiment is. I’m going to apply common moving averages and standard MACD oscillator to each type of charts and test the signals, compared with the same set of tools in the usual candlestick chart. I’ll sum up the results for each chart and the total outcomes in the end. I think I may develop a new, cool strategy, nobody has used before. As I've already started describing Renko, I suggest we the experiment start with it. As I've already said, the chart looks like a series of bricks or boxes, each of which is placed diagonal right to the previous one, at a certain distance. Each box represents a price movement by the value, you choose. In classical Renko, it is a permanent parameter and you set the most convenient for you value on your own. But mostly, by default, the box size is determined, based on a built-in indicator, ATR (Average True Range) with the period of 14 bars. In the chart above, you see such an example, where in the red box at the top, there is displayed ATR with the period of 14 and the range that was identified, based on it. In the given example it is 125.1 USD. According to these parameters, the chart will be like this: In the chart above, the top box price is 6505.2 USD, so, the bottom box limit will be 6505.2 – 125.1 = 6380.1 USD. On the price axis, you see a pink label with the current price at 6387.2 USD. To build a new brick, it is necessary that in the set timeframe (in the given case, it is 4 hours) the price moves up by 125.1 USD higher than the top limit at 6505.2 USD (if so, there will be a green box) or down by 125.1 USD lower than the bottom limit at 6380.1 USD, then a red box will emerge. As you understand, if the price doesn’t move in either direction by a certain value, the chart won’t move along the time axis, and so, one brick may include multiple periods of certain timeframes. To see it clearer, look at the chart below. You see, the last box in Renko chart was built at 23.00 on August 17. The chart was being built at 20.44 on August 19, and so, the candlestick chart would have been far ahead by that time. As it is clear, the main Renko chart advantage is filtering out minor price sideways movements. The chart, built of red and green bricks, makes it much easier to spot big trends and strong price moves. For a fair experiment, I’ll record the box size at the calculated value of 125.1 USD, so that the chart won’t repaint itself due to the price volatility. For the experiment, I’ll use a simple trading system, including two exponential moving averages with the periods of 9 and 26, and MACD indicator with usual settings (12, 26, 9). Finally, after analyzing the common candlestick chart, I have the following: I marked the meeting of moving averages by blue crosses. As known, each such meeting is a signal to buy or sell, according to the direction, in which the short moving average breaks out the long one. It is clear that MACD moving averages send many false signals, but the signals of divergence and convergence (blue lines) quite accurately predict the trend movements. You see, moving averages in the candlestick chart send far less false signals; therefore, this instrument can be used to filter MACD signals. However, it should be remembered that the signals of moving averages meeting, both in the indicator window and in MACD chart, are late. Therefore, we need a tool that can remove false signals and send enter/exit signals in advance. As it is clear from Renko chart, MACD and moving averages are coming even later than in the common price chart. It is obvious that the box size is too big, and so, we see all the signals, sent by indicators, too late. Having experimented with the box size a little, I got Renko layout to be more similar to the candlestick chart. As an example, let’s take the signals that were sent at the high of 8200. As it is clear, the place and the time of the signal by MACD indicator proved to be accurate and came true at 19.00 on July 25. The signal by moving averages was 4 hours earlier in the candlestick chart than in Renko chart. As you see in the chart above, if the Renko chart brick is smaller (in our case, it is 24 USD), the MACD signal is seen in the common chart 8 hours later. On the other hand, three false signals are seen in Renko chart, which are not in the candlestick chart (marked with green crosses). Summary: I cannot interpret the results of comparing the common candlestick chart with Renko chart in a definite way. It is clear that moving averages and MACD can be applied to Renko. But the number and the quality of signals mostly depend on how appropriate the box size is. One of the main Renko benefits is that it filters out minor price sideways movements that are often dangerous for traders, especially for those, who trade in the trend. But when the little block size is used, this advantage almost disappears. Besides, I should note that Renko chart itself is enough. You see that the green box in the right chart dated July 16 proves the signal in the candlestick chart, suggesting an upward reversal; and red box on July 26 proves the trend downward reversal, and the corresponding signal in the candlestick chart on July 25. Therefore, Renko chart is quite convenient and simple to confirm reversal signals. However, the use of indicators in Renko chart hasn’t yet been decided and needs further studying. I’m going to finish my comparative experimental analysis of Japanese candlestick chart and Renko chart on BTCUSD example. In my next educational article, I’ll break down Linear Break chart and compare it to the same Japanese candlestick chart, to find out its advantages and disadvantages. Good luck and good profits! Best regards, Mikhail @Hyipov ________________________________________ PS. If you agree with the forecast write “+” in the comments, if you don’t agree, put “-”. 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BITFINEX:BTCUSDEducation
by Hypov
1
BTC ... does RENKO confirm we still need to drop?Hello gang. OK so here's the Renko on the daily. If you've seen my previous ideas, you will notice I've been talking about a big triangle wave, along with some other people doing TA. These waves are bouncing in a big triangular formation ... 20k to 6k, 6k to 11.7k, 11.7k to 6.5k, 6.5k to 10k and now the final wave ... which has broken down below the triangle with a CURRENT bottom of 5.9k. Each of these long waves from the top of the triangle to the bottom and vice-versa I have found are a complex correction wave ... a WXY pattern. The WXY is a (5-3-5)-(3)-(5-3-5) system ... each bracket is (W)-(X)-(Y). So basically an (impulse-abc-impulse) for W, abc for X. and (impulse-abc-impulse) for Y. Sorry for going into detail, but this is really important to understand. Again I want to stress ... I have counted this system in ALL the major waves in the triangle, and I expect this correction down from 10k to be NO different. Turn to the Renko now ... start at the 9.99k top, and notice the red blocks are the impulse waves and the green blocks are the abc corrections. We have completed (impulse-abc-impulse)-(abc)-(impulse-abc- ...) and are working on that last impulse. Each of these red impulse waves are around 1300 to 1600 points long, average is around 1400 points. Applying that to this impulse, it takes BTC to 5350! I've also done an elliott wave count on the normal candle chart ... and if I compare that to the impulse we had from 7700 down, once again, it says we should hit between 5350 and 5400. There is key support at 5350/5400 that should be taken into consideration as well. At the moment we are in wave 4 ... and that can take us to 7250 to 73XX territory. Then I expect it to go down. Can't say when as this can now sideways for a few days ... but I do see one last collapse ... I'm hoping to see a nice V shaped bottom ... and yes it can go lower than 5.4k ... key support below that is 5k and 4.5k. I would be very surprised if we go lower than 4.5k without a significant correction first, or at least weeks/months of sideways and disinterest. Is a bounce from here possible ... yes, sure ... but I'd say lower probability ... and the only logical reason I see for that is the mass public viewing the 5900 to 6000 level as HARD support ... given it's been tested a few times. Once again, this is a low probability scenario for me right now. One last thing ... if we do bounce from 5.4k, I don't believe that is the absolute bottom. I see a few weeks of rallying, then another bear market. There is an important log trend line that needs to be touched to get us out of this mess ... it currently sits at around 3k ... it is rising as time progresses. Remember only a fool relies on one potential outcome. Do not make financial decisions with this info. For educational purposes only.
BITFINEX:BTCUSD
by MAGICMARK
6
BTCUSD ... Renko charts an underutilized tool?Dear team! Another trick I'm sharing ... Renko charts. For those that don't know renko plots bars differently to candles. Each bar represents like a fixed price drop, say $100. If you drop by $400, then it plots 4 red bars (4 x $100), and if it increases by $500 it plots 5 green bars (5 x $100). This supposedly takes out all the noise in the system (or at least most of it), especially noise from fake news, FUD and FOMO. If a candle wicks up and down, it ignores all that ... it only cares about since yesterday's close did it drop or rise in increments of a certain amount (like $100). Here I've plotted Renko on daily (a good time frame and available for free on TV), and I select "Traditional Box Size Assignment" and use a box size of $100. The method I've used basically is based on the following: - if there are 3 green blocks in a row ...you go long on the 4th green box (so after the 3rd, but before the 4th closes ... and the 4th needs to be green while you buy). - if there are 3 red blocks in a row ... you go short on the 4th red box (again after the 3rd red, but during the 4th red before it closes). I've gone back and showed how accurate the calls would have been if this method was employed since January 2018. The green L's are where a long call would have been made and the red S's are where short calls would have been made. The green zones I drawn are where profit is made. The red boxes I've shown are where a loss is made (the method failed). I'm sure you can see it's obvious, the technique works in a startling fashion! Way more green than red! This is not theory ... I've applied it to REAL historical data and if I was simply to follow the two rules above in a strict fashion! Remember only a fool relies on one potential outcome. Do not make financial decisions with this info. For educational purposes only. If you wish to make a donation, based on profit you made on my ideas ... it would be greatly appreciated. BTC address 14i2Xit5pH7Sz5TMegDn8vDT6VcoN85f42 ETH address 0x8a62eE1B2628297EA51aD08dadFFCed3F73e6eed LTC address LXoyzmL85HvED1LyHkJtGygUPbBUZd
COINBASE:BTCUSD
by MAGICMARK
3
Exploring Renko + Ichimoku in CryptoDiving into Renko because I love its simplicity and minimalism. This is an exploration of a potential strategy for COINBASE:BTCUSD using Renko and Ichimoku. I like imagining my charts as diving in and out of sea. When it's above water, go long. When it's below, short or stay away. RENKO set to Close, Traditional, and Brick Size 1/20th of current asset value. The area that the RENKO crosses in and out of is the Tenken-Sen of the ICHIMOKU The ICHIMOKU has the Chikou, Kijun-Sen, and Kumo removed and is optimized for Crypto with 10, 30, 60, 30 settings. Basically, when the bricks are above the Tenken-Sen, go long. Trail your stop loss 2-3 Renko bricks behind the current bar. Let's see how this goes! Have fun. Inspired by this Renko Ichimoku Strategy below:
COINBASE:BTCUSD
by spizike
1
Bitcoin is nearing a bottomOn the Renko chart, you can clearly see that Bitcoin is in a falling wedge, but what I want to note here is the volume based on price level. A way to think about this chart is, there has been more volume in the smallest amount of price range since Bitcoin's all time high. Now this could mean that its just a very large stepping stone, right before capitulation, where most people think it is a bottom. I see this as somewhat likely, and wouldn't be surprised to see as low as $4500 in the coming weeks. However I have to assume that based on the trends, volume profile and overall sentiment that we will see a bounce soon before continuing the bear trend.
BITSTAMP:BTCUSDLong
by EthereumAddict
3
MTF Renko Multi Time Frame Renko charts cross over of the lower time frame (box size) is the signal for buy/sell. Selection between the ATR and traditional box size is done by user. If you go by the traditional box size you have to select the box size manually. So change some based on the price of the Currency (you can begin by 1/10 of the currency price). Tips: It can be used for scalping or a confirmation along with your setup. in case of selection of the traditional box size, set the chart's time frame less than 1D.
by glemarc