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Heiken Ashi/Renko Bar Trading Strategy

 
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algobga

Heiken Ashi/Renko Bar Trading Strategy

The Heiken Ashi/Renko Trading Strategy

I have been interested in Renko candle trading for a while and have seen numerous videos with almost as many variations in strategies using Renko bars.

I came across one that I found interesting and decided to give it a test.  It lends itself to day trading and sometimes swing trading.

NOTE:  I am basing this strategy on a Youtube video and while it does not seem to have any ulterior motive attached to it, I have forwarded it to ‘management’ for their clearance.  If and when they clear it, I will post it here.

The set up is follows:

Renko bar indicator – I use two sizes, 3 and 6 pips.

Heiken Ashi indicator – default colors

EMA Trend Indicators – 10 EMA – tracks pair volatility.  50 EMA - pullback bounce.  200EMA -  long term trend.

MACD Indicator – MACD(15,50,5).

General rules:

  1. When the MACD is above zero, look for long opportunities, and below zero, look for short opportunities.
  2. Entry in general is when a candle crosses the 10 EMA and closes on the opposite side. 
  3. Confirm the entry by the MACD pulling away from the signal, either above the signal for Longs or below the signal for Shorts.
  4. Look for pinbars and/or dojis to indicate the potential trend change and time to exit the trade.

Some things I am doing during the testing period.

  1. I have set up 3 MT4 applications with 4 currency pairs on each.  Each pair has 3 configurations: H1 regular candle stick to indicate volatility and trend, 3 pip Heiken Ashi  Renko bar and a 6 pip Heiken Ashi Renko bar.  Therefore nine ‘tiles’ on each MT4 application.  (I have a 3-monitor configuration so it quite easy to scan all 12 pairs for potential entries and exits)
  2. I use 3 and 6 bar sizes to monitor the difference in volatility and see if one has setup/exit where the other doesn’t.
  3. I have added the Daily Pivot Points since they can be levels of resistance and/or targets.

Other:

It is early in the testing, but it looks like this setup may show potential counter trend trades,as well as trend trades, that are viable.

If anyone has experience with Heiken Ashi Renko bar trading, I would welcome your comments – positive or negative.

I hope I am permitted to post the video mentioned above which will give much more detail to the strategy.

Sun, 05/14/2017 - 7:23pm
 
Trini

This looks very interesting. Have you been able to build the same charts in Alveo? Do you know if it is standard Renko bars or Hybrid Renko?

I had a look at the video and it looks clean which is important because for me it means clear signals.

Thanks for sharing this--it may have been a great find.

 
algobga

https://www.youtube.com/watch?v=8Q6no5s2ULA

This is the link to video mentioned in my post. Management has cleared it for release.

 
jrh

Hi,

Thank you for sharing this concept - viewed the video as per the link and was very impressed!

I too would be interested to know more about it and hope with you that Management will clear it.

 
joe.d

Is it possible to display H-A candles on Renko bars?

 
Jerry Doland

This looks very good. Thanks!

Where do you get your daily pivot points?

 
AMACE

I also am using Renko charts in my trading. It seems odd to me that something that smooth's out price so well seems to be either unknown or ignored by so many. I use an ATR filter to determine my brick size and I update it on Sundays when the markets open back up each week. I have enjoyed great success with my strategy which consists of Renko with tails, two smoothed median moving averages (5 and 13 period), the Awesome Oscillator, and Fractal indicator.
Entries are made when the 5 MA crosses the 13 MA and the Awesome Oscillator is in agreement with the direction indicated by the 5 MA. The fractals are used to set stop loss point (2 fractals from entry point for initial stop) and as a means of trailing stop (trail by one fractal). I also suggest entering two positions and taking one off after a 20 pip profit and allowing the second to run while trailing the stop. once you receive a new signal exit any open positions and open a new trade in the newly indicated direction. When you are using Renko it is my experience that you should use 1 min data to create the bricks. I hope that this will assist those who are excited to try Renko. Please let me know what your experiences are and if you have any questions.

 
jhellem1

Algobga
This looks interesting I am going to try it out. How has it been working for you since the original post?

 
jhellem1

Where do you get the Renko bar indicator from? thanks

 
Tigger Bee

If you right-click on the chart to bring up the context menu, then select "Price Style" - the renko option is listed for display.

renko.png
 
jhellem1

Thanks Tigger Bee

 
777dan777

how did it turn out for u?

 
gpdno

FYI, last time I checked, the Renko charts did not work correctly in Alveo. You might want to double check the chart by comparing it to a Renko chart on a separate platform.

Peace,
Greg

 
clark5411

I am trying to incorporate a Renko chart in my setup. When I select the Renko option in the Price Style menu, I am prompted to select a "Box Size",with the default size being 1.0. I have two questions: 1)What does box size mean? 2) I'm interested in creating 5-tick Renko chart--how do I do this?

Any input would be gratefully received.

Regards,

Clark

 
tmurray440

Seems like the MACD setting is spot on. I'm going to test the MACD setting with my current Renko strategy. Thanks for sharing

Clark5411 here's a good explanation Renko bricks http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:renko

 
clark5411

Thanks tmurray.

 
onthebeach

Thank you for sharing. Very interesting!

 
Brady Bush

Hey Folks,

There was some question as to how you could set this up in Alveo...you can't. However you can set it up in a free tradingview.com account. See Attached.

I love the simplicity of this strat. I'm starting to test it out and will keep y'all posted.

Cheers!

renko_Heiken_MACD.jpg
 
nedews

Thank you Brandy.

It is nice website I will try to do my renko chart trading on that website.

 
lgalante

Yes I too have found that the Alveo charting is too limited, and I often have to go to other charts to do more complete or complex analysis. There are so many out there to look to.

 
Brady Bush

Ya, Renko is no bueno in Alveo. I've tried to use it to just enter trades when my charts on tradingview tell me but even in that case it becomes quite tedious to be looking at Renko on one platform and candles on the other.

 
54ravensbourne

Thanks Brady for your info

 
Brown111723

Liking this. Big fan of Renko (using Tradingview). Thanks for sharing.