Renko Stop and Reverse Forex Strategy

Trend markets that have long been expanding are one of the most profitable markets a trader could trade. This is especially true if the trader could catch the start of a trend and exit when it ends. You may have heard of shops that are trapped from the beginning and closed to the end, and this could have made you envious, whishing and also pierced the same configuration. however, these operations are very rare. In fact, it is very difficult to predict where the market is headed. Millions of traders out there have their own opinions about the market, and they all have different views, which affects prices.

However, it is still possible to catch these types of trades even without trying to predict where the market is going. How do we do that? Being on the market all the time.

But you may be thinking this is bullshit. It’s crazy to stay in the market without trying to evaluate where you’re going first. Well, let’s use a different chart that would give us an indication of a trend.

The Renko Chart

The word “renko” comes from a Japanese word meaning brick. At one point, you can understand why this table is given that name.

The Renko Chart is a diagram based on a mathematical formula, in which the main concern is price. Unlike regular candlesticks, it does not refer to itself over time, only the price. Measures price based on a formula and when the price advances by a certain amount, a box of Renko or brick is created.

This is what a Renko chart would look like.

Blocks are represented in red when prices fall by a certain number of pips, and boxes are represented in blue when price advances by a certain number of pips. Note how clearly defined movements are prices.

Regular candlesticks, with all their proven advantages, also have their drawbacks. Candlesticks are drawn with consideration of time. Originally, it was created with daily graphics in mind. But with current advances in technology, prices could be plotted in different time frames, even so far. The problem with this is that exchanges and corridors are based on different time frames. A sail pattern visible on a 4-hour chart may not be the same sail with another runner, due to different time zones, where the sails are based on. Also, price movements can occur even just minutes after a sail has closed. These create candles, which do not include the relevant price movements. Candles which traders base their business decisions on.

Unlike the candlestick periodic table, the Renko Table eliminates all these nuances, focusing only on price.

Notice how clearly defined a trend is in the Renko chart.

So how can we take advantage of these trends?

The installation of Buy – Inputs, Stop Losses & Exits
This strategy is based on a price drive confirmed on the basis of Renko’s lists. This confirmed impulse would be based on the third consecutive box where the price goes in the same direction. As soon as the price draws a third picture, we must enter the trade. To do this, we will place stop-entry orders to enter the trade.

Buy Entry Order: A pending purchase stop order must be placed above where the third box was drawn, based on the above boxes.

Stop the loss of: The stop loss should be placed three boxes underneath the input box, where the box changed color.

Trailing stop: The stop loss must be dragged at the same distance from the current price based on the boxes, until it is stopped at the stop profit.

This trade gained 104 pips risking only 15 pips in stop loss. That’s a risk and reward ratio of almost 1:7. There were three cases in which the price traces red boxes in the middle of the trend. These would represent setbacks. However, since our stop loss was followed three boxes below the current picture, trading was not interrupted prematurely.

The installation program Sales – Inputs, stop losses & outputs
Sell Entry Order: A stop order on hold must be placed below where the third box was drawn, based on the above boxes.

Stop the loss of: The stop loss should be placed three boxes above the input box, where the box changed color.

Trailing stop: The stop loss must be dragged at the same distance from the current price based on the boxes, until it is stopped at the stop profit.

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