Using Renko chart patterns in forex

Using Renko chart patterns in forex

In this video, David looks at how using tick and renko charts can help to determine momentum and trader participation.

00:10

Introduction to Renko charts

00:10

The speaker introduces non-time-based charts, specifically Renko charts, using the CAD/JPY currency pair as an example. They explain that the principles remain consistent across different time scales, including 15-second, 30-second, and one-minute intervals. The speaker also demonstrates how to verify the speed and appropriate brick size settings for trading on these charts.

00:37

Optimal brick size for CAD/JPY

00:37

The speaker demonstrates adjusting timing settings, moving through 15-second, 30-second, and 1-minute intervals to deliver an optimal brick size for CAD. This optimal setting is dynamic and changes throughout the session to maintain efficiency.

01:15

Trading without guesswork with Renko

01:15

The segment explains that using the indicator eliminates guesswork by automatically determining what to trade, allowing trading in harmony with the market’s speed. It highlights the benefits of combining Renko charts with time-based charts, where the time-based chart provides comprehensive information and the Renko chart incorporates volatility triggers through volatility candles.

01:44

Volume and trend monitoring in trading

01:44

The segment discusses a market moving into a congested area and then pulling back into the volume price oscillator (VPOC). From a trading perspective, the focus is on breaking away from this congestion zone. Volume is decreasing, indicating a potential shift, while a trend monitor changes to blue to signal staying in the current position. Although the example uses a 15-second chart, the underlying principles of Volume Price Analysis (VPA) apply across different time-based charts.

02:09

Using tick charts for momentum

02:09

The speaker explains the use of an on-time base chart to capture the raw momentum of the market. They demonstrate trading with tick charts, specifically on the Aussie yen pair, adjusting the tick settings to 89, 1, and 377 ticks respectively to ensure proper speed. The tick speedometer tool is introduced as a means to monitor the pace of ticks in the market.

02:42

Tick speedometer and market activity

02:42

The speaker explains the importance of monitoring market momentum using a tick speedometer, which measures the speed of trades in various short time frames such as 32 seconds, 1 minute, and 2 minutes. They highlight that currently, the market momentum is slow, indicated by red signals, reflecting sluggish market activity shortly after the London open. The market is at a pause point, waiting for the next phase of price movement, and traders should watch for increased activity as momentum begins to pick up.

03:42

Momentum revealed by non-time charts

03:42

The segment explains how Renko charts function as non-time-based trading tools that reveal market momentum. Unlike traditional charts governed by time, Renko charts progress based on the number of ticks. As market speed increases, these candles form faster, reflecting the dynamic nature of price movement rather than fixed time intervals.

04:13

Advantages of non-time-based charts

04:13

The speaker explains that the formation of market candles is independent of real time and instead depends on a set number of ticks. Regardless of whether these ticks occur in a nanosecond or several seconds, the candle completes once the required ticks are reached. This means in fast-moving markets, candles form quickly. The advantage of using non-time-based charts like tick or Renko charts is that they better reveal market momentum.

By Anna Coulling – creator of volume price analysis