What is a Renko chart mt4? All traders know what candlestick charts, bar charts, and line charts are, but there is one type of chart that is also popular but is not available on the MT4 platform, yeah, Renko chart MT4.
Renko chart, also a chart developed by Japanese people, which visually looks like a brick box arrangement, or in Japanese called “Renga”, this is the origin of the word Renko chart. If in a Japanese candlestick one bar candlestick is formed based on a timeframe.
For example on an hourly timeframe, meaning that one candle represents one hour of a time period.
But not on the Renko chart, it is formed by setting the distance of the pip.
So, for example, the Renko chart with a setting of 20 pips, then the brick box will appear after a distance of 20 pip price.
No problem with the time period, so the Renko chart display is neater, like an arrangement brick.
Unfortunately, the Renko chart is not available in default mt4, to attach to the chart, you need to download indicator the Renko chart mt4 first.
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- 1 What are the Renko charts?
- 2 How does the Renko chart mt4 work?
- 3 How to install Renko chart in mt4
- 4 How to trade Renko chart mt4 successfully
- 5 Advantages and disadvantages Renko chart mt4
- 6 Free Renko charts software download
- 7 FAQ
- 8 Final thought
What are the Renko charts?
As already explained the Renko chart is a chart model that is formed from pips distance adjustment and not based on time period.
So that the Renko chart does not use a timeframe.
Even though your plot on a different timeframe, the pattern, and shape of the Renko chart mt4 remain the same.
To understand the difference, we look at the picture below.
From the two pictures above we can clearly see the difference in how candlestick charts and Renko charts look like.
On candlestick charts, we will see candlesticks appearing based on the time period used.
for example, H1, this represents an hourly timeframe, where one candlestick will be formed after 1 hour has passed, bullish or bearish candle.
But on the Renko mt4 chart, one brick box will be formed after the price has passed the set distance.
For example, 20 pips, one brick box will appear after the 20 pips price range is either a bullish chart or a bearish chart.
Because the Renko chart does not use a timeframe.
The trader’s experience to set the Renko pip distance determines the quality of the analysis in conducting a market approach. Some traders may prefer the appearance of the Renko chart rather than the candlestick chart.
Because it is easier to know the distance of the pip, and also the regular appearance gives a neat impression.
How does the Renko chart mt4 work?
Renko chart mt4 is a unique way of analyzing markets. But because it doesn’t use a period of time and works based on pip changes, it’s rather difficult to use this to analyze market trends.
Renko charts never form horizontally, they will only show up and down as prices change.
How the Renko chart works in a strong trend condition. It will form more brick boxes, as long as the trend lasts. The stronger the trend, the more brick boxes will be plotted in the chart during that time period.
So that the conclusion is the time axis in the Renko chart is not fixed. But contracts in accordance with the strength of the trend.
There are three conditions will be
- Strong trend = more brick boxes plotted
- Weaker trend = fewer bricks will be plotted.
- No trends = no bricks plotted.
Comparison of Renko charts and Japanese candlesticks
Because the basis for chart formation uses different methods, there will be differences in how each chart reacts to prices and time periods.
In a strong trend condition, the Renko chart will react to price by responding to the formation of more bricks, even though it is only a short period of time.
While Japanese candlesticks that use time periods will react when the time interval has been met.
Despite strong trends will not form new candle bars, thus allowing the length of the candle body to vary from one another.
Let us take an example of the difference between candlestick charts and Renko charts, take a look at the image below.
On the top chart is a candlestick chart by taking a daily timeframe, while the chart below is a Renko chart by taking a 100 pip set.
Both are labeled with numbers 1 to 7 as a marker. If we notice that between points 1 to 3 they give a proportional pattern, it is still quite similar.
But after point three, the Renko chart does not respond in the same way. There is a difference where when there is no price movement, it will not form a brick box.
The formation of the Renko chart axis is very variable. It can be faster than the timeframe or slower with respect to the timeframe all depending on the price changes that occur.
It might be a bit confusing, but using a Renko chart can provide insight into trends that should be ignored. As happens on candlestick charts, focusing on the axis of the Renko chart.
How to install Renko chart in mt4
Renko chart is not available by default on mt4, to use this chart pattern you must download the indicator file first.
- Download file in the mql5 market
- After you click download, a window will appear asking if you already have mt4 or not, if so then it will automatically attach an indicator to your platform, you must run mt4 for this process.
But if you download the indicator from another source, then you need to take a few steps to attach the indicator to the mt4 platform.
It’s easy enough, first you run the mt4 platform, then click File – >> open data folder – >> MQL4 – >> Indicator.
The Renko chart indicator file that you downloaded earlier then copy-paste it into the indicator folder.
After that, you close the mt4 platform and run it again.
Then the custom indicator is available Renko chart indicator, you just need to double click and a box will appear that you can adjust the Renko chart settings.
Or the fast way you can use your mouse over the navigator window on the left chart.
Just right-click and highlight and click refresh, then the indicator will appear in the navigator window.
How to trade Renko chart mt4 successfully
The basic pattern of a Renko chart is shaped like a brick, also known as a block.
Where a brick box is the same as a block, and the color of the Renko chart will be different between bearish and bullish.
How to trade the Renko chart successfully is indeed not as simple as understanding the basic concept of this chart form.
Some traders use bullish brick patterns as signals to buy, and descending brick patterns to sell.
However, in practice, the way to use the Renko chart can still be expanded, and what is of concern is the block arrangement.
Some use ATR for Renko charts, but some use numbers for example 20, or 40 and so on.
If the candlestick represents a period of time but the Renko chart represents the pip distance in one block.
Renko Divergence with awesome oscillator
Divergence trading is to take advantage of the slope difference between indicators and charts.
Renko charts can also be used for divergence trading, by using MACD, Osma, or RSI.
But here we will use Awesome oscillator to find Renko divergence trading.
After you load the Renko chart on the mt4 platform, then you call the awesome oscillator indicator to add to the platform.
How to trade Renko divergence is to find an anomaly of slope differences between the histogram and the Renko chart.
- For short positions, it is the rule that prices form higher highs while awesome oscillators form higher lows.
- For long positions, if the price forms a lower low, the awesome oscillator histogram forms a lower high.
Renko chart mt4 divergence signal is quite good with good accuracy, but this requires patience in waiting for the anomaly.
And still requires a risk-reward ratio because sometimes the divergence signal that appears is the only fake signal.
Renko chart mt4 as support and resistance
Resistance support is the zone most used by traders to determine when they will make an entry and also the target to be achieved.
Renko charts can also act as support and resistance by finding valleys and peaks of brick patterns using horizontal lines.
By creating support and resistance projection lines on the Renko chart, it can also be used for future trading plans by taking into account the support and resistance levels of past price history.
Using support and resistance manually using the Renko chart, also requires patience in waiting for prices to reach the support and resistance levels drawn.
We can use the brick color as a signal entry.
By using support and resistance levels, we can also use the Renko chart to breakout trading.
If the price crosses support and resistance levels, we can open a position after the breakout occurs.
Advantages and disadvantages Renko chart mt4
Doing analysis with the Renko chart also has advantages and disadvantages.
If we look at it, all bricks are the same, neatly arranged showing trend up and down more simply.
Some traders like to use the Renk chart because it is simpler to looking trends than with candlesticks.
Which are more difficult because of the different patterns of one candlestick with another.
In summary, some of the advantages of the Renko charts mt4 is.
- More accurate in showing the direction of the trend.
- Decrease market noise.
- May be combined with other indicators and expert advisors.
- No data are redrawn.
- Signal accuracy is quite good.
The disadvantages of the Renko chart mt4 are
- Bricks that are drawn sometimes are slow if there is no movement then-new bricks will not appear.
- The Renko block size plays a role, setting a small value to the likelihood of noise often occurring, and a large value of speed will decrease.
- The additional indicators used to become more complicated even though the brick is rarely in the opposite direction.
- No data Open High Low Close prices like candlestick charts because bricks are based on pips distance.
Free Renko charts software download
1. Does Renko Chart work?
Yes, it can work well and is very effective at identifying key support and resistance levels because it is far from noise compared to candlestick charts.
You can set bricks with the Average True Range (ATR) indicator.
ATR serves to filter out normal noise or volatility of financial instruments.
2. Are Renko charts profitable?
Profitable or not will depend on the user.
The Renko Strategy is designed to eliminate market noise as it occurs on candlestick charts.
Renko can be used for various asset classes, including cryptocurrency, and the forex market, as well as stocks.
3. Do Renko charts repaint?
The current Renko will continue to change its shape until it has finished forming, and in the same way on candlestick charts that use time periods also repaint.
Renko chart mt4 is a unique chart pattern, similar to the candlestick, this is the work of Japanese people. But unfortunately, this graphic form is not available by default on the mt4 platform.
Maybe if there is an option for this it will be more interesting. However, traders can use the Renko indicator made by third parties to try to use the Renko chart for trading purposes.
In practice, some traders may be face difficulty using Renko charts and prefer to use candlestick charts. And which one is best compared to candlestick charts?
Personally I prefer to use candlesticks because there are open high low close data, while Renko charts are not available. Finally back to each trader, because there are also easier and more profitable with Renko charts. Understanding what is used is far more important.
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