The Renko Chart Trading Strategy is a powerful, noise-reducing technique that focuses purely on price movement rather than time or volume. Renko charts are constructed using fixed-size bricks (or blocks) that form only when price moves a specific number of points, making trends and reversals cleaner and easier to identify. This makes Renko ideal for traders who want to catch clear trend moves, avoid false signals, and simplify decision-making.

Popular among trend traders, swing traders, and breakout traders, Renko charts offer a disciplined, visual method for high-probability trade setups.

What Are Renko Charts?

Renko charts are time-independent. They print a new brick only when price moves a fixed amount in one direction:

• A bullish brick forms if price rises a full brick size above the previous brick.
• A bearish brick forms if price drops a full brick size below the previous brick.

Key characteristics:

• Each brick is the same size (e.g. 10 pips, 1 point).
• No partial bricks or time-based candles.
• Reversals require a full brick-size move in the opposite direction.
• Bricks do not overlap—trends appear smooth and structured.

Why Renko Chart Trading Works

• Removes market noise and time-based volatility
• Clearly defines support, resistance, and trend direction
• Simplifies chart analysis for cleaner setups
• Great for identifying breakouts, pullbacks, and reversals
• Helps reduce overtrading and hesitation

Renko’s simplicity makes it highly effective when combined with moving averages or other trend-confirmation tools.

How to Trade the Renko Chart Strategy

1. Choose the Right Brick Size

Brick size should reflect the market’s volatility and your trading style:

Style	Brick Size	Best For
Scalping	5–10 pips or small points	Fast-paced setups
Intraday Trading	10–20 pips or moderate range	Trend trades and breakouts
Swing Trading	20–50 pips or higher	Longer-term position trades

Use ATR (Average True Range) to calculate dynamic brick sizes, or test fixed values based on backtesting.

2. Identify Trend Direction

• Uptrend: Series of bullish bricks with no bearish reversals
• Downtrend: Series of bearish bricks with no bullish reversals
• Reversal signal: First opposite brick after a trend (e.g. bearish brick after 5 bullish ones)

Renko helps visualise pure directional movement, making it easy to spot trend continuation or early reversals.

3. Entry Strategies with Renko Charts

Breakout Strategy:

• Identify a consolidation zone or horizontal resistance/support
• Enter on the formation of the first breakout brick beyond the range
• Confirm with volume spike or trendline break (optional)

Pullback Strategy:

• In a strong trend, wait for a small counter-trend Renko move
• Enter when the next brick resumes the dominant trend
• Ideal for low-risk entries with tight stops

Reversal Strategy:

• Look for extended brick runs followed by a reversal brick
• Combine with divergence (RSI/MACD) or key level rejections
• Enter after the second confirmation brick for added safety

4. Use Moving Averages for Confirmation

• Apply EMA 10/21 or EMA 20/50 on Renko charts
• Use crossover and slope to confirm trend
• Bricks above rising EMAs = strong uptrend
• Bricks below falling EMAs = strong downtrend

These filters reduce false signals and help you stay aligned with the broader trend.

5. Manage Risk with Structure and Brick Logic

Stop-Loss Placement:

• 1–2 bricks beyond the last reversal brick
• Or below/above a support/resistance brick cluster

Take-Profit Methods:

• Fixed R:R ratio (e.g. 2:1)
• Exit after reversal brick forms
• Scale out as bricks begin to flatten or stall near structure

Trailing Stops: Adjust after every few bricks or use MA crossover as exit trigger.

Best Markets for Renko Chart Trading

Markets:

• Forex majors (EUR/USD, GBP/JPY, USD/CHF)
• Commodities (gold, oil)
• Indices (S&P 500, DAX)
• Cryptocurrencies (BTC/USD, ETH/USD)
• Stocks with strong momentum

Best Sessions:

• London and New York overlap for forex
• US market open for indices and futures

Strategy Summary Table

Component	Details
Chart Type	Renko (fixed brick size, price-based)
Entry Methods	Breakouts, pullbacks, reversal bricks
Confirmation Tools	EMAs, RSI divergence, structure zones
Stop-Loss	1–2 bricks behind reversal or key level
Take-Profit	Fixed R:R, trailing brick exit, structure-based
Best Use	Intraday trend trading, swing setups, clean charts

Conclusion: Trade with Clarity Using Renko Charts

The Renko Chart Trading Strategy delivers clarity, confidence, and consistency by removing the distractions of time and volatility. Whether you’re targeting breakout moves, riding trends, or catching reversals, Renko simplifies your analysis and sharpens your execution.

To master Renko charts and integrate them into a powerful trading system, enrol in our Trading Courses at Traders MBA and learn how to trade price with true precision and purpose.