Trading strategy based on the Renko chart

This trade strategy differs from many others by the fact that buy/sell signals are tracked not by the standard chart, but by the Renco's graphicswhich shows the price movement in the form of separate "bricks". Many traders are interested in the Renko chart, but they are afraid to use it because they do not understand the principle of its construction. ForTrader.org explains: as soon as the price of an asset passes the specified number of points (this parameter can be set when creating the chart), another "brick" is shown on the screen. Depending on which way the price has moved (up or down), a bar of the corresponding color is displayed. The chart itself is formed with the help of the Expert Advisor, which comes with this trading strategy.

Setting up the desktop of the Renko-based trading strategy

The trading strategy was developed based on a hypothesis, which hypothesizes that when forming a bar (or another brick) against the current movement in 70% cases, the next brick will be formed in the same direction.

Trading strategy settings:

• Currency pair: any
• Timeframe: Renko charts don't have timeframe. M1 is used to form the chart itself
• Bidding time: any
• Risk Management: no more than 5% of the deposit per trade

Setting up a trading system:

1. Unpack the archive with indicators, Expert Advisor and template.
2. Copy the indicators to the folder experts -> indicators.
3. Copy the expert to the experts folder
4. Copy the template into the templates folder.
5. Restart the terminal.
6. Open the M1 chart of the desired currency pair.
7. Transfer the RenkoLiveChart_v3.2 Expert Advisor to an open chart.

In the General tab of the Expert Advisor settings, select the following check boxes:

The following values must be set in the "Input parameters" tab:

Parameters to pay special attention to:

• Parameter RenkoBoxSize indicates by how many points the price should change when the next brick is displayed.
• Parameter RenkoTimeFrame is only used when forming the name of the chart.
• Parameter ShowWicks is responsible for displaying shadows on the Renko chart.

After setting the parameters, click "OK".

Next, you should see a smiling face in the upper right corner of the chart, which indicates that the robot has been successfully installed. If you see a cross instead of a smiley face, click on the "Expert Advisors" button on the main panel.

For your Expert Advisor to work correctly, you need to set the correct settings in Metatrader 4. Go to the settings section and check the following boxes:

Important point: after installing the Expert Advisor, it is necessary to wait for at least one tick to appear, otherwise the Renko chart will not be formed.

After the tick appears, execute: "File" -> "Open offline"

Set the RENKO template on the graph that appears.

The schedule should look like this:

Now you can apply any indicators to this chart, as well as change the view of the chart itself (for example, switch to displaying it as bars).

Rules of the trading strategy

One element of the trading strategy is reversal bars. Reversible bar - is a bar of opposite color to the current completed bar (for example, if the current bar is green, the reversed bar is red, and vice versa). The figure below shows some reversible bars.

Rules for opening trades on the strategy

Buying deal opens when the following conditions are met:

• A reversible green colored bar appeared.
• The Slope Directional Line indicator has turned blue.
• Green Line MACD indicator is above the red line.

A bargain for sale opens when the following conditions are met:

• A reversible red colored bar appeared.
• The Slope Directional Line indicator has turned yellow.
• The green line of the MACD indicator is below the red line.

When trading this trading strategy, it is preferable to set the risk at a rate of 2 to 1. Stop loss is 10 pips, Take Profit - 20 pips. However, you can experiment with other risks or trailing stops.

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