Simple forex system renko trading

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It is a simple yet effective strategy for forex trading, and the accuracy is high. That said, as with other scalping methods, you must be quick with your hands and ready to make quick decisions when necessary. Not familiar with scalping? Read more here. Also, you must be at least slightly familiar with the forex concept called divergence.

Here is a link renkotraders. It is based on the mean of the brick size that is being used as an offset. For another trader, a simple or an easy forex trading method might just be price action based. No matter what kind of answers one might get, I am sure that all traders will agree that a simple or an easy forex trading strategy is one that does not clutter the charts too much and is easy to understand and more importantly, the amount of variables involved you may also call them as rules are minimal.

Thus, a forex trading strategy such as buy when A happens and B does something can be considered as a simple enough strategy which anyone can apply. There are many Renko based forex trading strategies listed on this website. However I am always on the lookout for a trading system that is not only easy to understand but good enough to trade. These are some of the factors that could qualify it to be a simple forex trading strategy. The Swing Failure Method The idea for this easy forex trading strategy came from the concept of swing failure.

This was a method that was outlined in the Dow Theory. There is however some similarly in the concept. The Swing Failure method is a rather old yet very robust concept in the markets. It was first introduced in the work published by Charles Dow and his partners and are part of the Dow Theory principles. How to identify the trend? According to Charles Dow, an uptrend is where price rises steadily and makes higher highs peaks and higher lows troughs or dips.

Similarly, in a downtrend, price declines steadily and makes lower highs and lower lows. Charles Dow Swing Failure Chart When price fails to make a new low or a new high and reverses course, and starts to make a new high or new low, it is considered to be a swing failure and indicates a change in trend. As you can see, there is nothing complicated about this. Now that we have an understanding of the swing failure chart, we can already form an idea on where to go long and where to go short using this rather simple concept of trading.

Trading rules for a simple renko trading strategy using Swing Failure Method As the chart above shows, we look for short or long positions at D. Ideally we can expect to see some retracement back to the low or high formed at point B, which is where this strategy takes a little bit of a twist. Once we expect a retracement to D, we then look for the ABC pattern. Look at the above chart but with some minor modification now, to get an idea. Again, it looks a lot easier and simple visually.

For the targets, the first target is of course the point [a] followed by an equal measure or two times from entry to first target. Simple forex renko trading strategy — Trade Examples In the first example below we have a swing failure pattern that was set up with a lower high formed in C. However, we had to wait for a confirmation meaning that price had to break down below B and then retest this level to establish resistance.

Once we had a Renko reversal box here, a short position was initiated, with the stops at C because there was no local high here. Simple trading strategy with swing failure method — Short set up The first target was at the first reversal level at 1.

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Trading rules for a simple renko trading strategy using Swing Failure Method As the chart above shows, we look for short or long positions at D. Ideally we can expect to see some retracement back to the low or high formed at point B, which is where this strategy takes a little bit of a twist.

Once we expect a retracement to D, we then look for the ABC pattern. Look at the above chart but with some minor modification now, to get an idea. Again, it looks a lot easier and simple visually. For the targets, the first target is of course the point [a] followed by an equal measure or two times from entry to first target. Simple forex renko trading strategy — Trade Examples In the first example below we have a swing failure pattern that was set up with a lower high formed in C.

However, we had to wait for a confirmation meaning that price had to break down below B and then retest this level to establish resistance. Once we had a Renko reversal box here, a short position was initiated, with the stops at C because there was no local high here.

Simple trading strategy with swing failure method — Short set up The first target was at the first reversal level at 1. This was then followed by target at 1. After the first target was reached, the trade would be moved to break even. Therefore, the trade gave a small profit of 20 pips and no risk left. Thus, the eventual decline to 1.

Remember that these profits came at no risk. Simple forex renko trading set up — Long example The next example shows a long set up method, which is slightly mixed. Here you can see that there was a swing failure at C. After price broke out above point B, there was no reversal at B, but instead, price fell lower 0.

This does not change our bias unless price fell below 0. Simple trading strategy with swing failure method — Long set up Then, we can see price lifting off, only to fall back to B with a reversal Renko bar at 0. So we go long here with stops at 0. The first target is of course 0. The next target comes in at 1. The initial risk was 50 pips which was moved to break even upon reaching the first target.

This gave a profit of 40 pips. The remainder of the profits of 50 and pips came at virtually no risk left on the table. There was also the additional benefit of already having made 40 pips. These charts have similarities with candlestick charts but have some differences.

The simplified structure of Renko charts means they are easier to interpret and drive quick decisions. These systems are perfect for day traders and can benefit any type of trader. These charts make it easier to identify the movement of the market as they eliminate the noise associated with other types of charts used for long-term trading methods. Each bar on the Renko chart is called a brick because of its unique shape.

The size of the brick in this system is determined by the trader. Reading the chart is easy because the bricks can be compared easily with one another. The change in colour and direction of the bricks indicate that the trends are changing and the prices can swing. Each brick stands for a price range and can be adjusted to the trading requirements. This means traders who hold their positions longer would use different brick sizes than those trading penny day stocks.

For example, you are using Renko charts with 25 pips in your trading method. Bricks are formed only when the price moves either up or down by 25 pips. However, in a Renko chart, the price moves twice the distance of the brick size to change the colour. The right size of a brick is determined by using the Average True Range to get it in tune with the price action.

A large brick size is advisable if you hold low-risk positions for longer periods of time. For high-risk positions, smaller brick sizes are appropriate. Best Renko Trading Strategy Renko trading strategies are simple and versatile systems that traders can use to pocket some profits. You can use a variety of simple systems with Renko blocks for the cleaner representation of the price action. Consider a simple, profitable strategy that only focuses on the bricks and requires no technical tools.

A powerful Renko chart pattern with wicks involves considering two consecutive bricks in the same colour, both having wicks. The position of the Renko pattern is not important here. It can be either at the middle of the end of the trend.

However, the pattern has a high success rate if traded right. You simply view the chart patterns between the two bricks and ensure that the blocks are in the same direction within the range. The Renko chart following this rule is an ideal setup to take the signal.

You can easily identify the entry point and the stop loss value. Here are some of the other simple yet effective Renko trading strategies. Renko Ichimoku Strategy The Renko Ichimoku strategy is a highly profitable and simple trading method. The indicators used in this strategy are readily available with trading packages or can be downloaded from the internet.

The Renko chart is plotted using the Ichimoku indicators and the method allows the trader to follow the trend easily. Ichimoku is a method that combines a series of moving averages which, when plotted on a Renko chart, can help the trader quickly determine the position of the market. This method has five components calculated in different ways to represent the support and resistance in a trend.