Trading with Renko Charts

Setup

• Chart: switch from time-based candles to Renko bricks
• Brick size: use ATR-based (e.g., ATR(14) rounded) — adapts to volatility. Fixed brick size (25 points on Nifty) also works
• Only new brick after N points of movement in one direction — noise is filtered by design
• Trend visible as a sustained sequence of same-colour bricks

Entry

Long: enter after 2-3 consecutive green bricks following a stretch of red bricks (trend reversal signal). Short: mirror.

Exit

Exit on the first opposite-colour brick (or after N opposite bricks for a slower exit). Renko is inherently a trailing-exit system.

Stop-loss

Below the most recent red brick's low (long) or above the recent green brick's high (short) — typically 1-2 brick sizes.

When it works

• Clean trending regimes — Renko excels at riding sustained trends
• Instruments with sufficient volatility to print bricks in reasonable time
• Traders who accept that Renko lags actual price (bricks confirm only after the move)

When it fails

• Very quiet markets — bricks print rarely, delayed signals
• Choppy sessions where bricks flip colours frequently — whipsaw losses
• Tight brick sizes that generate too many false signals

General trading rules that apply

Regardless of the specific setup, these apply to every strategy on this site:

• Never risk more than 2% of your account on a single trade
• Place a hard stop-loss before entering — no exceptions
• Journal every trade: setup, reason, outcome, one lesson
• After two consecutive losses, stop for the session
• Backtest and paper-trade for a month before deploying real capital