The Ichimoku Renko Chart Strategy is a high-precision trading method that combines the trend-following power of the Ichimoku Cloud with the noise-filtering clarity of Renko charts. This advanced hybrid approach is perfect for identifying clean trends, avoiding whipsaws, and entering trades with confidence—especially in volatile forex and crypto markets.

By removing time from the equation and focusing solely on price movement, Renko charts work seamlessly with Ichimoku to highlight strong directional momentum and natural support/resistance zones.

Why Use Renko Charts with Ichimoku?

Renko charts display price movement in blocks (or “bricks”) of fixed size, ignoring time and volume. This reduces market noise and helps isolate true breakouts and trends.

Ichimoku Kinko Hyo offers a full trend-tracking and confirmation system, including:

• Kumo (cloud) for trend direction and support/resistance
• Tenkan-sen and Kijun-sen for momentum and equilibrium
• Chikou Span for confirmation
• Future cloud projection for foresight

Together, they provide:

• Clean trend signals
• Smoother entries and exits
• Built-in risk and target zones

How to Set Up the Strategy

1. Choose the Right Renko Brick Size

• Use ATR-based brick size (e.g. 14-period ATR on H1)
• For major forex pairs, brick sizes of 10–25 pips are typical
• Smaller sizes = more signals, higher noise
• Larger sizes = smoother trends, fewer entries

2. Apply Full Ichimoku Indicator on Renko Chart
Make sure to include:

• Tenkan-sen
• Kijun-sen
• Senkou Span A & B (cloud)
• Chikou Span

Use the default Ichimoku settings (9-26-52) unless backtesting suggests otherwise.

Trading Strategy Rules

Step 1: Confirm Trend Bias

• Bullish Bias:
  • Price above the Kumo
  • Tenkan-sen above Kijun-sen
  • Chikou Span above price and Kumo
• Bearish Bias:
  • Price below the Kumo
  • Tenkan-sen below Kijun-sen
  • Chikou Span below price and Kumo

Step 2: Wait for Entry Trigger on Renko

For Long Entries:

• Price breaks above recent high brick and confirms above Kumo
• Tenkan/Kijun cross upward below price or within the cloud
• Chikou Span clears price candles

For Short Entries:

• Price breaks below recent low brick and confirms below Kumo
• Tenkan/Kijun cross downward above price or within the cloud
• Chikou Span below price

Step 3: Stop Loss and Take Profit

• Stop Loss:
  • Below/above Kumo edge
  • Or 1–2 bricks beyond the breakout point
• Take Profit:
  • Trail using Kijun-sen or Chikou Span
  • Use opposing Kumo or prior swing high/low as static targets
  • Alternatively, use a fixed multiple of brick size (e.g. 3–5 bricks)

Step 4: Re-Entry on Pullback

• Pullback to Tenkan-sen or top/bottom of Kumo
• Enter on new breakout Renko brick in the trend direction
• Especially powerful if supported by Chikou Span and sloping Kumo

Example: USD/JPY Renko Buy Setup

• Brick size: 15 pips
• Price breaks above the Kumo with bullish Tenkan/Kijun cross
• Chikou Span confirms above price
• Entry: 150.60
• Stop Loss: 150.15 (3 bricks below)
• Take Profit: 151.80 (8 bricks up, near resistance)
• Reward-to-risk: approx. 3:1

Best Market Conditions

• Trending environments with medium to high volatility
• Pairs like GBP/JPY, EUR/USD, USD/JPY
• Avoid choppy or range-bound sessions with tight Renko bricks

Advantages of the Strategy

• Visual clarity: Renko eliminates time-based noise and false candles
• Structure-based entries: Ichimoku provides rules for confirmation
• Works across instruments: Effective in forex, crypto, indices, and commodities
• Low-stress execution: Reduced screen time, fewer fakeouts

Common Mistakes to Avoid

• Using arbitrary brick sizes—always test or use ATR for precision
• Entering inside the Kumo without confirmation
• Trading against the Chikou Span or flat Kumo
• Ignoring higher timeframe trend direction (H1 or H4)

Conclusion

The Ichimoku Renko Chart Strategy offers a refined, rule-based system for identifying and capturing high-probability trades with reduced noise and cleaner signals. By merging Renko’s simplicity with Ichimoku’s structure, traders can follow the smart money, avoid false breakouts, and ride strong trends with confidence.

Want to master advanced Renko + Ichimoku execution with professional insights? Explore our Trading Courses to build a confident, structured approach grounded in logic, clarity, and consistency.