Using the renko indicator on MT4 or MT5 to find trades in forex

Using the renko indicator on MT4 or MT5 to find trades in forex

In this video we explain how to use the renko indicator on MT4 or MT5 to find trades as a scalping trader in forex. The renko chart is a perfect way to trade as it reveals the momentum in the market, something you never see on a time based chart. The reason for this is that a renko chart is not based on time, but on the size of the brick. This is what governs the open and close of the brick and once this metric has been met, the renko brick is closed and moves on to build the next.

00:14

Analyzing slower vs faster time frames

00:14

The speaker discusses analyzing slower time frames for trading decisions, contrasting this with their current focus on faster time frames. They mention using MT5 instead of MT4 for charting and highlight a significant downward move in the US Dollar to Canadian Dollar currency pair. The daily chart shows the pair attempting to break away around the volume point of control a few days ago.

00:46

Understanding daily forex sessions

00:46

The speaker discusses the current price at 135.73 on daily candles, noting that some candles have a wide range. Despite this, trading opportunities still exist within these ranges. They highlight that a daily candle in the forex market represents 24 hours, encompassing three separate trading sessions, and emphasize the importance of treating each session individually.

01:22

Impact of session crossovers

01:22

The speaker explains the concept of market crossover times, when a new financial center opens, such as New York or London, influencing trading patterns. They highlight that after New York closes, trading shifts to Asia, primarily Australia and New Zealand on the discussed day due to a Japanese holiday. The speaker notes that a single candle on a chart can represent three distinct trading sessions, often resulting in a trade direction reversal between London/Europe and New York. They emphasize the importance of adapting to these shifts and observing daily charts to anticipate market behavior, especially on volatile or narrow trading days.

02:25

Dollar weakness and oil prices

02:25

The market is experiencing a very narrow and choppy range, with price action stuck around the volume point of control across multiple time frames, awaiting a breakout. A recent breakdown on the daily chart has led to notable moves, influenced largely by the weakness in the US dollar, which is currently at a significant low. This dollar weakness is positively impacting oil prices, which have recovered from a difficult period a few months ago, benefiting the Canadian dollar. On a faster five-minute chart for USD/CAD, key intraday levels like the Camarilla levels, volume, and candle patterns are being used to identify specific trading opportunities.

03:29

Using camarilla levels on 5-min chart

03:29

The discussion explains the significance of the fourth level (S4 or R4) in the Camarilla trading method, highlighting how prices often test this level and either consolidate or reverse. The example shows the dollar approaching the S4 level, consolidating without breaking lower initially, indicating potential for a reversal. Eventually, the price breaks below the S4 at around 33.68. This movement is also analyzed on a time chart using volume point of control, which shows a similar sideways action around S4. The speaker hints at further analysis using Renko charts to find effective trading combinations.

04:44

Renko chart setup and benefits

04:44

The speaker explains that Renko charts do not use time as a factor but instead focus on price movement measured by pips. This particular Renko indicator is based on the Average True Range (ATR) set at 2.81 pips, meaning each brick represents that amount of price movement. The example given involves the USD/CAD pair, where the Renko bricks help identify key price levels such as support at 33.60 and 33.68. The Renko chart effectively filters out noise from traditional time-based charts, providing clearer trend visualization, congestion phases, breakouts, and pullbacks, making entry points easier to identify.

06:32

Renko for clear trend identification

06:32

The speaker explains how to interpret trend dots and tremolo indicators when they turn bright red, signaling missed trading opportunities. They describe a congestion phase near a support level around 33.50, which can be used as a re-entry point. The discussion includes using the five-minute time chart to identify buying efforts indicated by wicks at the bottom of candles during a downtrend, suggesting attempts to push the price higher.

07:41

The price shows support near 33.50, confirmed by both price and volume indicators, suggesting potential for an upward reversal. The Renko chart helps identify faint signs of this reversal and assists traders in deciding whether to enter aggressively or wait for clearer confirmation. Typically, price reversals go into a congestion phase rather than forming sharp V-shaped recoveries, though exceptions exist, such as the recent pound-aussie movement. The Renko chart’s utility lies in helping traders time their entries based on clearing specific lows.

08:49

Entry strategies with renko and time charts

08:49

The speaker discusses trading strategies, emphasizing that the choice depends entirely on the individual trader’s style and risk tolerance. They highlight the importance of knowing whether you prefer to take more risks for potentially higher rewards or adopt a more conservative approach. The speaker also notes a possible market reversal occurring, prompting traders to consider whether to act quickly, such as scalpers, or wait for further confirmation before making a move.

09:18

Scalping on 1-minute MT4 chart

09:18

The discussion focuses on scalping using the fastest time frame available on MT4, which is the one-minute chart. Key indicators like candle patterns, volume, two-bar reversals, and trend monitors are analyzed to identify potential entry points. The trend dots, which closely follow price action, change color before the trend monitor does, providing an early signal. The presence of volume point of control (VPOC) and low volume nodes are also important, as they suggest areas where price may move quickly. Overall, the approach emphasizes aggressive entries based on multiple indicators aligning, including volume support and renko chart signals, with consideration of how much time the trader wants to commit to the trade.

11:23

Multi-timeframe analysis and trade targets

11:23

The speaker discusses trading strategies focusing on checking spreads and analyzing multiple time frames, including renko charts. They emphasize understanding market context, such as recent significant moves like a big down day on USD/CAD, and identifying potential small gains in price wicks. The importance of assessing where the price is likely to go using support and resistance levels is highlighted, referencing tools like camarilla levels and volume point of control. The speaker notes specific price targets (e.g., 3368 and 3361) and explains that volume-based levels can indicate how quickly price might move through certain zones, especially during typically quieter market periods.

13:10

Scalping on MT4 vs MT5

13:10

The speaker discusses looking at scalping strategies on the MT4 platform, noting that while they have experience with MT5, they are focusing on the time frames available on MT4. They briefly mention checking their site and preparing to demonstrate or explain something related to trading.

13:52

Quantum Trading education resources

13:52

The speaker describes various resources available including analysis on the Dow Jones, gold, and silver, as well as recordings of webinars and shorter video segments on their YouTube channel. They mention content also shared on Facebook related to a forex education program. Details about the forex education program, which includes around 200 hours of video and various modules, are available on the Quantum Trading Education website. A forthcoming video will provide a preview of the program and its indicators.

15:01

Indicator packages and upgrades

15:01

The speaker explains that the indicators shown on the charts are available for purchase on quantumtrading.com. Customers can buy individual bundles or full packages, with the option to upgrade later and receive credit for previous purchases. Full package owners benefit from automatic additions of new indicators as they are developed. Upcoming offerings include support for TradeStation and specialized webinars focused on TradeStation.

15:32

Upcoming Tradestation and order flow webinars

15:32

The speaker discusses plans to integrate order flow into the VPA methodology, highlighting that this has been a long-term goal. They mention using TradeStation’s radar screen and data, and possibly incorporating NinjaTrader as well. The speaker invites viewers to email them for further questions or information.

16:07

Contact info and session schedule

16:07

The speaker provides contact information, inviting viewers to email David at david@quantumtrading.com. They inform the audience that the trading sessions have been rescheduled by a day, now returning on Wednesday morning and continuing as usual on Thursday. The speaker wishes everyone a great trading day and a good weekend, regardless of their location or circumstances such as lockdown.

By Anna Coulling – creator of volume price analysis