Renko Chart

The Renko chart (from the Japanese word “Renga,” meaning “brick”) was developed by Japanese traders in the 17th century. It focuses only on price movements, forming new “bricks” only when the price moves by a set amount. Unlike traditional charts, time is not considered, making it useful for filtering out minor price changes.

Importance

• Great for trend-following strategies, as it filters out noise.
• Provides clear support and resistance levels.
• Ideal for traders focusing on long-term trends.

Limitations

• Not suitable for short-term trading due to delayed signals.
• Requires careful selection of brick size for accurate trend analysis.