RENKO CHARTS

[learningboutinv]

Lefty, I got an idea from your recent post: "I usually resort to trial and adjust measures..for the daily, I don't want a 2 box reversal (meaning white to red, or red to white) to trigger at less than about 5-6% moves on a 2X instrument."

Anyhow, what if we made a renko chart of the 1x ETF to trade off of since they are less volatile than the 2x ETF in terms of price movement in order to reduce whips. (Plus the 2x etfs trades til 4:15 so I notice that closing prices can drop or go up to affect daily brick sizes while the 1x ETF closes at 4PM.)

I don't know how well this would work, I just sampled QQQQ vs QLD and QQQQ on renko appears to have less whip than QLD, so during the time QLD was whipping back and forth QQQQ stayed in the uptrend and we can use QQQQ to stay in the trend once we open a position off the 2X renko chart. But I guess as you have stated, selecting the proper brick size is key. Notice that from March 08 to June 08 there were 4 whips in QLD and only one in QQQQ. I don't know if I selected the correct pt size for QQQQ at .75. This was just a quick chart I threw up, I will have to experiment and see if .80 or 1.00 is a better size. Let me know what your thoughts are and if you have time this weekend to try MDY vs MVV or SPY vs SSO. I got a deadline on a project for Monday so I will be unfortunately working a bunch the rest of this weekend.