A Renko chart is acknowledged as a kind of price chart that the bricks create. This custom kind of chart was originated in Japan. The name “Renko” has originated from the Japanese word which means brick. People find a Renko chart to be distinct as the blocks or bricks represent only the price and time doesn’t turn into a factor when they use Renko bars. A highly precise Renko chart is formed on tick data.
The notable thing is Renko charts do not remain constant and move up and down from earlier bricks at a 45o angle. Again, bricks are never placed beside one another. Users of a Renko chart find out the size of the brick for the chart and they then determine when a novice brick would form.
The working mechanism of a Renko chart
For understanding the working process of a Renko chart, you can go through an example. You can consider the below Euro fifty Index price chart. When you choose a 35-size brick then it would signify that the price is required to move thirty-five points from the earlier brick’s closing price for forming a novice brick in the present direction. As bricks are incapable of forming beside one another, the price is required to move seventy points for forming a brick in the reverse direction. In this instance, the bricks highlight only the moves of thirty-five points. Moves that are smaller than thirty-five points won’t form novice bricks.
The timeframe mentioned on the chart is one day and it means novice Renko bricks are formed on a day’s closing price. As the earlier brick happened to be red, the price is required to drop thirty-five points less from the red brick. This will form the next red brick. As it is a regular time frame, it could drop fifty points lower than that level. However, if the price does close lesser than thirty-five below the earlier red brick then a novice brick will not be drawn because here, only the closing prices do matter.
Accessing free Renko charts
You are liberal to access various Renko charts that are available in real-time. Here, you can also conduct your technical analysis besides taking your chart’s snapshot on the fly. Renko charts online work the best with Chrome, Safari, and Firefox browsers. However, you won’t be capable of customizing the chart because you will get the free Renko charts for your reference only. For activating the Renko chart automatically, you can alter to any instrument according to your choice.
Changing the time frame of Renko charts
In Renko charts, the time frame is set to various intervals and they range between 1 second and 1 month. When you select a 1-minute chart then it means bricks get drawn according to the closing price every minute. A Renko chart is useful for displaying price data for different financial instruments, like currencies, stocks, commodities, ETFs, treasuries, and indices. People also use Renko charting analysis for bond markets. Trading is also possible with Renko but Renko bricks aren’t useful when you wish to turn into a long-term investor.