The renko chart is one of the most powerful tools a trader has at his disposal to operate in the market. It can be used both on the stock exchange, forex CFDs and provides us with a safer way to see beginning moves.
With it we can "filter" lateral market movements and better view supports and resistances based on price, that is, an excellent price action tool. In this article I will explain what renko chart is and how it can be used in an easy way.
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2. Renko chart – definition
It´s originated in eighteenth-century Japan and was developed by rice merchants who sought an efficient means of measuring price variation for buyers in the various villages. Over the years, it has been used in several other financial instruments, as well as candlesticks.
This method of graphics originates in the Japanese word 'renga' which means 'brick' and for its formation are ignored the element time (for position change) and volume (which determines the size of the candle), so in renko the bricks have All the same size. Therefore, in order for a new brick to be formed the price must exceed the previous brick in …