RENKO CHARTS

[PKPet]

Thanks for all your help and patience. I have been using Renko charting for the last 2 months and have had some nice returns. Again thanks for the information.


Peter

[renkoron]

Pete, this is the worst case senario of RENKO or any other system if you did not use stops or watch the open and futures. Gap open reversals, as you know, are impossible to deal with. I wrote earlier that I gave back a bunch on that day but still had a good trade. I do not feel you can only watch one time frame. I watch 60 minute and 30 minute in addition to daily, shorter than this will drive you bonkers with the whipshaws. If I have a good trade going it is easier to see a whip come up on a shorter time frame and wait it out. If you are watching daily and price drops below brick price keep an eye on shorter time frame. Watch high/low also as in PNF charts. This last week there were reversals during day. Good luck. Ron

http://stockcharts.com/h-sc/ui?s=TNA&p=60&yr=0&mn=0&dy=3&id=p43921698936

http://stockcharts.com/h-sc/ui?s=qid&p=60&yr=0&mn=0&dy=3&id=p43921698936

[PKPet]

When trading in the daily timeframe, because the bricks do not become permanent until the end of the day do you trade when the the second brick becomes available during the day before the bricks become permanent or wait until 3:45 and evaluate whether the 2 bricks are available to indicate a reversal. If you wait until the end of the day the majority of the move could be lost- a good example would be Monday 12/1 where you would have lost 50% of the previous week's move.


Thanks in advance.


Peter

[renkoron]

PETE, LINES ARE START OF NEW DAY, WEEK,and etc. Ron

[joanneg]

Lookin forward to some new chart from you Soapy!

[PKPet]

I am new to Renko chaarting and was wondering the significance to the vertical lines that appear on the chart. Does this indicate that the bricks are now permanent and a trend or reverasal can be determined? During the day I've noticed that bricks disappear even though the brick size is a fixed amount (points not ATR)

Thanks for the help.


Peter

[PKPet]

The problem with the bricks and time frame is that the bricks do not become permanent until the close of the time frame. To trade mid day is pointless with a daily time frame because the reversal may not stay. This market changes on the dime so intraday trend changes do occur but don't last for more than 1-5 days. I am trying to get 50-60% of the move so am struggling with the question of size and time frame.,

These bricks are not predictive, they keep you in the trade. I try to look at support and resistance etc.


Peter

[renkoron]

Pete, it seems how you find the brick size is not important as finding one that does not whipsaw. The volatility we enjoy is a blessing. As to time, if you have Stockcharts change the 15 minute chart to a daily and see what happens. It will tell you the importance of time. It is interesting to work with. Ron

http://stockcharts.com/h-sc/ui?s=MVV&p=D&yr=0&mn=0&dy=7&id=p61864700826

What do you think?

[PKPet]

Brick reversal is dependent upon brick size and time. In this market with such volatility the market turns on the time. When there is a change in trend no one has any idea how long it will last.The last 50 days there has been an average daily swing of 4.3%. In the past the swing avg has been 2%. ATR is an attempt but it changes which makes all reversals suspect. Bradley turn dates, Hurst cycles, astrology all have been used to determine how long trends will last. 60 min charts seem to work the best with .5 point boxes. I think the box size should be determined by The avg %price swing over 50 days multiplied by Stock price divided by 3(the number of boxes price has to increase to get a 2 box reversal). No backtesting just gut reaction.

mvv =.086x23/3 =.64


Peter

[renkoron]

Peter, I think you are right. Leftyg that used to trade MVV on weekly basis and used 1.5 brick size. He said he had gone back and did alot of studies and stated he lost very little over trading daily and freed up alot of time for other things. If you read some of his posts along with JLS and fast_eddie you will get some insight. Indicators are not the answer on RENKO. IMHO. Brick reversal is. If you check with the brick sizes I suggested and you go back and see how few whipsaws there were on those ETFs. Kind of fun but remember we are in a bear market. LOL Ron

http://stockcharts.com/h-sc/ui?s=MVV&id=p30652225951&def=N&listNum=4

http://stockcharts.com/h-sc/ui?s=MZZ&id=p96840665674&def=N&listNum=4

[PKPet]

Thanks for the reply. Brick size is the key and the time frame is important to try to minimize the whipsaws and vanishing bricks.

Peter

[renkoron]

PKPet, I do not use ATR, I use a fixed brick size of .5 on MVV, QLD, UWM, TNA, BGU on these lower priced ETFs. On QID, TWM, MZZ, BGZ, TZA I use 1 or 1.5. The 3x ETFS are getting high in price till today. I feel you will be happier trading the longer time frames because of the whipsaws with smaller brick size and shorter time frames. On reversals during the day I watch 60 minute to watch for reversals. If you check back I think there was a reversal during the day on 21, 13, and 5th of November. You just go with flow. I was long into this morning TNA and Qld, closed them before market opened and went short with QID. Took a beating of about a fourth of last weeks gains. That is part of trading RENKO on longer periods, I have found it less crazy and more profitable. The brick size is the answer. If you find the perfect size let me know. I have requested Stockcharts to provide a percentage size box like we have on PNF charts. I watch PNF charts on my positions. Watch high/low also for reversals. Ron

http://stockcharts.com/h-sc/ui?s=MVV&p=15&yr=0&mn=0&dy=7&id=p54951332179

[PKPet]

Using your daily chart, since the bricks are not permanent until the end of the time frame, how do you know when to enter a trade? Consider today with the gap down, how did you know there would not be a reversal in the middle of the day,and if there were, what would give you a clue that a reversal was coming? Thanks in advance. I used a 15 min time frame and had a 2 box reversal with MVV only to see the reversal blocks disappear. Part of it is that the block height changes if you use ATR 14, Close.

Peter

[renkoron]

pipchaser, I use Stockcharts.com realtime for my charts. They have a free chart online but no download. Other than that if you check with your broker about free downloads with account. This is not much help but a start. Good luck. Ron

http://stockcharts.com/h-sc/ui?s=bgz&p=D&yr=0&mn=0&dy=20&id=p83176001507

[pipchaser]

Hello..I am new to the site. I was searching for Renko Charting..can anyone direct me to a good, free Renko download site???

[Soapy Bubbles]

Ugh I need to catch up

[JLS]

fast_eddie,

The information at that link doesn't get me excited. When I first look at the work of others, I try to quickly filter out all the noise and find the serendipitous discovery. That happened when I first saw a Renko chart, read how it is calculated, and compared it to the same information displayed in a candlestick chart. For me, when the discovery isn’t there, spending too much time looking at noise tends to stifle creativity so I look no further.

You wrote “My desire was to develop a mechanical system that one would trade next day open based on the EOD renko results and …”.

Using EOD data and trading infrequently was my motivation in developing the trend system that I used last winter and early spring. I don’t want to spend my days staring at a computer display. However, it is possible and desirable to make those infrequent trades during the day and with intraday data. You will loose a lot of potential gain trading Renko if you wait till the following day. I strongly suggest you not do that. With my existing system I designed in a predictive warning system to alert me to the probability that a trade was near, so on the following mornings I would spend time at the computer; or if the probability was so high that the event seemed inevitable then I would place a limit order ahead of time.

To do a proper backtest of a system based on Renko, one must really have a downloadable source of intraday data. I understood that you had that with StockCharts, but maybe that was a bad assumption on my part. I’m not a member at StockCharts so I don’t know what they offer. For backtesting it doesn’t matter if the data is delayed; all that matters is that you have data granularity. If you need a source, I suggest you try QTXL which can be downloaded free at http://www.analyzerxl.com. You can also download it at http://tinyurl.com/69kftc. QTXL is an interface between QuoteTracker (which you can use free) and Excel. QuoteTracker will grab intraday data from your eTrade account. Don’t spend too much time looking at Renko charts using QuoteTracker; they appear to be wrong. While at AnalyzerXL.com, and you want to spend a few bucks, you can buy RTQuotesXL. It downloads 15-minute delayed and fee-based real-time quotes for stocks, options, indexes, and mutual funds from Yahoo! Finance.

I have to go outside now or I’ll have an anxiety attack. FWIW I have some very good friends in Pennsylvania that I made while doing contract work for Amp, Inc. I was their Phy-Layer tech rep at IEEE standards meetings regarding high-speed data com. One of them loves the snow and wishes it was there all the time. He is not a skier. He’s a backpacker and snow camper. And like me he’s a government-get-out-of-my-way-and-leave-me-alone-to-take-care-of-myself-thank-you-very-much-anyway kind of guy.

[fast_eddie]

JLS, you’re lucky it’s warm enough to be outside where you are. Here in Western PA, it’s been freezing for the past couple weeks.

What prompted my interest in trying to back test a system based on renko charts was the link in the ibox above….http://breakpointtrades.com/controls/preview.php?nl_id=267…
My desire was to develop a mechanical system that one would trade next day open based on the EOD renko results and the TA indictors he describes (ema 7, SAR, and stochastics).

As you said, the moving average points are time independent and based on individual brick numbers. I confirmed that for myself for sma’s of various lengths calculated using opening and closing brick values rather than time period numbers. Taking that thinking one step further means that values for SAR and the stochastics would be calculated from bricks rather than the time period.

Here lies the difficulty, since each time period could create none or several bricks. And for each brick you must calculate your TA values and apply your buy-sell criteria. Going forward from today as a starting point would not be too difficult once you’ve determined your cell formulas as there would only be a relatively small number of bricks to deal with. However, I’m completely lost on how to approach back testing for several years’ worth of data other than going through day by day (or intraday period by period – I can get a limited amount of intraday data without charge via my e-trade account). Being able to back test easily would permit optimizing brick size, moving average periods, alternate TA indictors and so on.

Another consideration is that one could not enter the trade until the beginning of the next period, irrespective of which brick (when multiple bricks are created at the end of the period) actually initiates the buy-sell signal. Action could only be taken at the end of a period since any bricks generated intra-period may disappear if there is an intra-period reversal. Eyeballing renko charts created by stock charts to back test doesn’t indicate for other than eod, when the next period starts.

I hope all this made some sense. As I said before any suggestions or assistance you can provide is greatly appreciated.

Good luck trading and have a happy Thanksgiving.

Ed

[JLS]

fast_eddie,

So now I’m slow in getting back to you -- until the weather turns really bad, I tend to spend more time outside (where there ain't no computers).

I’m interested in what you are doing because I also have a preference for using Excel, and I am also interested in Renko and SAR as well as a few other things. I developed an investment system last winter that works very well in trending markets; however, it does not work well in sideways, or highly volatile, markets; so I use an alternative system then. My trending system has been backtested thoroughly using Excel. The alternative system has not. Neither system uses Renko or SAR. My desire is to improve the trending system such that it automatically adapts to sideways and volatile markets; and my strong feeling is that Renko-type filtering and SAR are going to be strong contributors (along with ATR, which I already use extensively). One-system-does-it-all is my goal.

I’ll assume you already have a downloader to put both historical (EOD, or End Of Day) values and real-time data in Excel. If you don’t, I can give you references to downloaders (for both EOD and real-time) -- some free; some low cost. The one I use is not free but it came with a lot of extras, only a few of which I use.

Calculating Renko bricks is easy, but it would be relatively difficult to plot a conventional Renko chart in Excel without using VBA. That is because Renko is time-independent, but the standard Renko chart still has time as a horizontal scale and it is usually highly nonlinear. An alternative, which is easy, is to create a P&F (Point and Figure) chart in Excel. When the right parameters are chosen for P&F analysis, the information it provides is identical to Renko. PNF is easy in Excel simply because it does not have any time scale: so you could create a sheet that does analysis on the left side of the sheet (along with conventional charts, if you like), and has a PNF chart on the right side of the sheet that “grows” into adjacent columns and rows to the right (and in that way, does not grow into your analysis and display area).

Regarding your question: “I've noticed that ema's overlaid on a renko chart seem to have different values than ema's for a candlestick chart for the same period. What are the renko ema's being calculated from?” …

Moving averages on candlestick charts are calculated from closing data (or a combination of prior closing data and the most-recent trade); and the interval of the calculation is defined by the interval of the chart. For instance, a sma-10 would be calculated over 10 days on a daily chart, but would be calculated over 10 hours on an hourly chart, and would be calculated over 10 30-minute intervals on a 30-minute chart, et cetera. Therefore, a moving average is a price-time filter. This calculation does not make any sense on a Renko chart because time intervals do not really exist on a Renko chart -- only bricks and reversals exist, and time is only shown for abstract reference. With Renko a brick is drawn when a certain price criterion is met, not when a time interval ends. So when you do a sma-10 on a Renko chart, the program is probably doing a 10-brick average on closing brick data -- but you might have 10 bricks in a day or it might take 10 days to form one brick.

My point of view is that it makes no sense to perform time-dependent averages on Renko data. This is because the Renko filter, itself, removes time from the source data which is time dependent. If you want to add a delay factor -- delay being something that all filters add whether they are time filters or not -- it would be simple enough to decide to make your trade after a predefined number of bricks have been drawn within a new trend. This could be referred to as a “brick delay”. This is done in P&F by selecting the Reversal factor. You almost get the same effect by choosing to draw larger bricks. It would be interesting, though, to perform time-price averages on raw (OHLC) data and use the result of that to determine Reversal factor or brick size … which is what I have been experimenting with ...

For what it’s worth, my work with Renko so far suggests that it would be of value to have brick size automatically adapt to a combination of ATR (Average True Range), and price, and perhaps time (which is what SAR, properly applied to raw data, does). For instance, in times of high volatility it seems advantageous to define brick size as a percentage of ATR, whereas in times of low volatility it appears advantageous to define brick size as a percentage of price. In terms of “brick delay”, always make the trade just after the first reversal brick is drawn, and concentrate on developing a Renko chart technology that, in itself, has the minimum number of short reversals -- which, as of now, does not seem difficult to do.

[joanneg]

CCYTQ
60 Min Renko Good luck!

[I Like Bottom Fishing]

Hi good morning joann can you do a renko chart of CCTYQ thank you and always the best of trading.

CCTYQ RENKO Chart Request.

The old CC chart is no longer available in renko chart.

[fast_eddie]

Sorry I didn't reply sooner....with regard to excel, I'm pretty good with code within the cells. I can write macros by stepping through them, one keystroke at a time, and then modifying to suit my purposes. Straight VBA out of the starting gate is a little over my head right now.

I'm not so much interested in the actual renko chart as I am the value of the bricks at the close of a period so they can be compared to sma or other TA values.

I've noticed that ema's overlaid on a renko chart seem to have different values than ema's for a candlestick chart for the same period. What are the renko ema's being calculated from?

Thanks for all the help you can provide.


fe

[joanneg]

GSS

[JLS]

fast_eddie,

I need more information in order to know what to recommend.

Can you write (fairly proficiently) normal (within-the-cell) Excel code? Can you write Visual Basic for Applications (which is available within Excel)?

The reason I ask the second question is that the charts within Excel are rather limited -- meaning you have to use tricks to create a Renko chart if you limit yourself to charts provided within Excel.

[fast_eddie]

My intent for using excel was to backtest various strategies, brick sizes, and confirming TA signals to optimize returns. In real time I use stockcharts with auto update and that has served well. However, the best I can do for backtesting is eyeballing charts for given time periods, one period at a time, which gets to be very tedious.

I can get intraday data as well as normal daily info, so i figure it would be a worthwhile exercise if I could do it.

Thanks for any direction you can provide.

fe

[JLS]

fast_eddie,

what do you want to do with Renko and Excel? Maybe I can help. I use Excel, but not yet for Renko -- thinking about it though.

Have you considered using QuoteTracker? It does Renko; the price is right; and it does real-time with backfill depending on your data provider.

My personal opinion is that you will make more money with Renko on a daily chart with auto update.

[renkoron]

fast eddie, good idea, it takes some of the whipsaws out. This volatilty has been awesome. Ron

[fast_eddie]

Just eyeballing, the mdy trade would have gone from about 89 to 83, on the short, or about 7 %. Meanwhile mvv ran from 114 to 128, for a little over 12%. Even though I may trade the enhanced etf's or options, I always do my preliminary analysis in the base equity.

fe

[renkoron]

fast eddie, good job, if you would of bought mzz at the same time what would of happened? Ron

[fast_eddie]

fwiw, I tried the 15 min renko with mdy today..just paper trade. Gave a good entry for the short and would have made good money.



the corresponding candlesticks look like



wish I would have traded it for real

fe

[renkoron]

Sorry no help with me. Welcome to the board. Ron

[fast_eddie]

Hi all,

I've just started playing around with renko charts and am in the learning mode. Does any one know how to input open, high, lo, close data into an excel sheet and generate a renko chart?

thanks in advance for any assistance.


FE

[PKPet]

In determining the proper points to be used in the Renko chart, the process used is the daily timeframe candlestick chart over a 1 year timeframe and using the ATR 14 indicator. If a different timeframe is used such as a 60 min or 15 min Renko chart is the ATR detrmination made by using the respective candlestick chart with the same timeframe as the Renko chart?

Peter

[mudturtle]

GLPW .75

[charger]

Thats good stuff there Ron.
I like how he points out that they allow you to trade without emotion.I need to get together with someone like that and compare notes on these things.

[renkoron]

NICE ARTICLE


on RENKO charts.

http://breakpointtrades.com/controls/preview.php?nl_id=267

[TheInvisibleHand ™]

Nice board what does renko say for gnw hig?

[renkoron]

LEFTYG, we got a good group of people talking RENKO on TREND1 board. We need your perspective on the subject. The volatility is awsesome. We will never see this again in my lifetime. Come join us. Miss your input.Ron

http://stockcharts.com/h-sc/ui?s=MZZ&p=D&yr=0&mn=0&dy=15&id=p11829628569

[joanneg]

Ive been awful lately, gonna spend some more time here this week, Its nice to see u are still here!

[renkoron]

joanneg, Glad to see someone is watching the board. There is no action here. ron

[joanneg]

Good Morning Tony, heres a 60 min chart and a 15 min
Looks interesting!!(lemme know if you want a different time frame) All my best!

CC 60 min


CC 15 min

[I Like Bottom Fishing]

Hi good morning e can you do a renko chart of CC thank you and always the best of trading.

http://www.mffais.com/cc.html

[Soapy Bubbles]

Hmm... I see your point. Ok -- make a presentation and a fully annotated chart for iBOX use. Check the iBOX for the size of the chart.

[charger]

New theory soapy,I've had a lot of time to study these charts in this crappy market and here is my buy and sell theory.A buy is when the trix(3,3)crosses on top of all the other trix on my charger of trix indicator,You will also see that when this happens usually the macd(5,15,10)will cross on the same candle.A sell is when the trix(3,3)crosses below itself,This is important so that if it is a headfake you can exit the stock soon enough to get your money back or take a little loss.If you can sell as soon as the trix(3,3)crosses below itself even if you get caught up in multiple headfakes the one time you catch the runner will make up for them.Here are a few examples.Love to get your feedback and help with these renko charts if your still in to them.

[Soapy Bubbles]

Hmm... Any good ideas lately?

[renkoron]

LEFTYG, MZZ had a good run. Congrats. Not much activity here. The market must of chased them away. Been watching shorter time frames for awhile. Good trading.

http://stockcharts.com/h-sc/ui?s=QLD&p=30&yr=0&mn=0&dy=7&id=p48033296011

[sammy1024]

thanks for the help.

[bobjack]

Sammy, I think it just means that the top of the last white box = 573.75.
If you make the box size = 15, then that "number that you refer to" becomes 600, which is the top of the last white box tonight, while the close is shown as 607.45.

Since this is just Monday, the weekly value is meaningless till about 3:30 on this coming Friday.

Since Renko does not plot time factor, using an hourly, daily, or weekly "Update" value can change the whole look and smell of the chart. It is kinda hard to get your arms around.
Lookin at today (Monday)on a weekly chart is like lookin at the first 5 minutes of an hourly bar on a 60" candlestick chart.

On a weekly chart, today's blocks could be totally changed by Friday.
On a daily chart, today's blocks would be locked in, or could not change.

If you setup the Renko on your QT charts, there is no way to pick an update period -- QT appears to update the chart constantly, taking only brick size into account.
Hope this does not just make it all the more confusing,
bobjack

[sammy1024]

hi
i had a question on renko charts. i have $mid using stockcharts with 11.25 pts set up on a weekly chart. it says 573.75 in the top left. does that mean the weekly chart has to close about 573.75 for the reversal to count friday at 4pm?


thanks

[sammy1024]

lefty,
how is it going? can u post a chart of you mvv setup? u use a weekly chart for renko charts?

thanks