Renko Charts Live

I posted these live Renko charts at "Investors University" so that those interested can see them live during trading hours.
You may wish to copy the link for future reference. LIVE CHARTS LINK

"Renko" charts are now available at Stockcharts.
"Renga" is Japanese for "bricks". They seem to act a lot like P&F charts. (Except they are linkable and you can add indicators.)
Perhaps by watching them live, we can better understand how they work and how they may help traders.
As with P&F charts, they do not show gaps and the horiztontal time line varies.
Investopedia on Renko Charts: LINK

1 Minute:
http://stockcharts.com/c-sc/sc?s=$SPX&p=1&b=5&g=0&i=p35969990435&a=138242864&r=5846.png

5 Minute:
http://stockcharts.com/c-sc/sc?s=$SPX&p=5&b=5&g=0&i=p74341326782&a=138242805&r=4339.png

60 Minute:
http://stockcharts.com/c-sc/sc?s=$SPX&p=60&b=5&g=0&i=p37721680279&a=138242790&r=9989.png

Daily:
http://stockcharts.com/c-sc/sc?s=$SPX&p=D&b=5&g=0&i=p31589067859&a=138242705&r=3667.png

Weekly:
http://stockcharts.com/c-sc/sc?s=$SPX&p=W&st=1998-01-01&i=p96417784584&a=138242530&r=1958.png

Monthly:
http://stockcharts.com/c-sc/sc?s=$SPX&p=M&st=1998-01-01&i=p74451188775&a=138242430&r=2190.png

You will notice that the weekly and monthly bricks (above) do not show May yet.
That is probably because we have not closed above or below the previous brick.
Also, I see that the monthly is still on a sell as it was in 2001, however the weekly is on a buy after 6 red bricks.
We didn't see a buy in 2001 until 10 red bricks.

Currently the hourly is on a sell but should revert to a buy with a close above 1418 or so.
As with some P&F charts, these Renko charts use ATR (Average True Range) so the actual levels magically change from time to time.
I'm not sure I like that.

Here are 3 screen shots from Friday morning's action.
Note how the gap down is not shown as a gap but sucessive down bricks.
Note also how the chart's high and low labels change as price changes because of the ATR.
Even the horizontal time bar changes!
54.94 was the print low near the open and was the low of the day.
These Renko charts do not even show that price.

Edited by Rogerdodger, 03 May 2008 - 03:07 PM.

way cool... would you agree that daily resitstance is around 14-20 and weekly resitstance is around 54?

These type of charts a very useful. So is the 3 line break. They are a basic trend chart on price using different "views" to the user.

PLEASE BE VERY CAREFUL WHEN ADDING INDICATORS.

THE MOST DANGEROUS, UNLESS YOU UNDERSTAND IS MOVING AVERAGES.

WARNING FROM STOCKCHARTS = please be very careful about using those until you fully understand what they are telling you (for instance, a 20-period moving average becomes a 20-reversal moving average).

MSS

Edited by mss, 03 May 2008 - 04:03 PM.

Rodger, this is not magic. Renko is a simple filter that basically tries to remove the noise that happens within 1 ATR move. The technique puts a new brick after the prices move beyond one ATR, so you are taking about 1 ATR risk in your trade. Then it is better to enter a trade when the prices are near the bottom of the current brick and put a stop right below the brick for long trades and the opposite for the short trades for both trend and reversal trading. Choosing a large ATR will only cause you to miss the trades since the prices will hardly come near the bottom of the current brick. The market volatility effects the ATR, so you have to track the changes in the ATR. Tracking the VIX could help; if the VIX is declining, the ATR will reduce, if VIX is increasing, ATR will increase and so will your risk since it won't reverse until a large reversal happens.

http://stockcharts.com/c-sc/sc?s=$SPX&p=D&yr=1&mn=0&dy=0&i=p95153359422&r=8326&.png

Here I used 6 ATR for the swing that happen every 2-3 wks instead of default value of 14, it seems like it is for the trend trading...

Yes.
No magic.

It looks like price must exceed not only the current brick but also the previous before reversing.
Therefore with the default 14 ATR:
The monthly looks like it must reverse 75 S&P points to change direction! It's almost there.
The weekly about 50.
The daily about 20.
Hourly about 6.
5 minute about 3.
the 1 minute about 2 points.

Perhaps these charts show pivot points.
Your daily chart above shows 1409.91 as 2 previous pivots and the top of the current brick.
And it looks like we would need to close below 1390 or so the see a red brick reversal with an ATR 6.

Are the bricks any different than the X's and O's on P&F charting except that they are stair stepped rather than stacked?

Edited by Rogerdodger, 04 May 2008 - 10:32 AM.

Roger, Great thread and thanks for introducing me to Renko charts. Arbman, I really like your added method of interpretating these charts. Best of Luck to both of you, UBW

Are the bricks any different than the X's and O's on P&F charting except that they are stair stepped rather than stacked?

Probably not. These charts are just producing the pivots for you systematically, so you have to understand where to enter and put the stop or the accounting of trading...

We all share something UBW