Renko Chart

Renko Chart
Renko charts originated in Japan like the Candlestick Charts. They are related to Kagi and Three Line Break charts. The name derived from the Japanese word Renga for bricks.

A Renko chart consists of bricks. Only one input, e.g. the daily close is necessary for drawing a Renko chart. The time relation, trading volume and chart information such as high and low prices are not taken into account.

Renko charts show the trend of the market.

Construction and Information in a Renko Chart

In a Renko chart, a brick is drawn if the price moved by a defined amount, called the bricksize. The price of the current day is always compared to the price of the last brick (which can be much older than a day). The Renko chart drops all price movements smaller than the bricksize. Therefore, only major trends of a stock are visible in the Renko chart. Small movements fall out of the graph.

The time elapsed is unimportant for this kind of charting. The time axis is not linear.

Bricks of downward and upward direction are displayed in different colors, e.g. black/red. The colors can be set in the properties.

When trading with Renko charts, remember that the filtering effect inherent to the method leads to delayed signal generation.

General Chart Properties

When the chart is active, you can edit the chart properties in the toolbox, for example the history length, the axes and legends.

You can also

Content-Dependent Chart Settings

In the properties of the displayed stock (symbol), you can find additional parameters. Besides the Standard Properties, you can find specific parameters for this chart type.

Instrument Properties

Input - Select which data to use for calculating the chart (Open, High, Close, Low, Volume).

Bricksize - Enter how many ticks give a brick, or enter a percentage value (e.g. "10%"). The bricksize works like a noise filter. It defines how much the input has to move from the last given brick value before a new brick is drawn.

Reversal - Enter the number of bricks that have to be generated in the reverse direction to cause a change in trend. The higher the value, the stronger the trend reversal has to be to be displayed in the Renko chart.

Compress Bricks - Here you can select whether bricks of the same price will be merged.

Daily Restart - Here you can select whether the Renko chart calculation should start anew each day.

Startvalue from Open - Here you can select whether instead of the input given above, the open value should always be used as start value.

Renko Properties

Color - Here you can select a color for the line border.

Bullish Color - Here you can select a color and opacity for the bullish brick.

Bearish Color - Here you can select a color and opacity for the bearish brick.

Open Color - Select the color for open bricks, i.e. if no close price is available yet.

Show Thresholds - Here you can select whether the price levels that have to be crossed to result in new bricks should be displayed as small, right-aligned lines in the chart.

Artificial Brick Highlight - Here you can select whether bricks that were artificially created due to price gaps between bricks should be highlighted by transparent colors. Select a transparency from the list.

Links and Books

Beyond Candlesticks - Steve Nison