Renko (Renko)

A Renko chart is a non-time-based chart constructed of bricks that indicate price movement as a way to help expose trends and support and resistance levels. A brick is created each time the price exceeds the top or bottom of the previous brick by some amount, which you set in preferences.

Renko charts can be used for regular symbols and their inversions but cannot be used for synthetic strategies and other complex expressions.

These charts can be used to measure the duration of a brick with:

•      trading systems, custom studies, and conditions;

•      MinSinceBarOp and SecSinceBarOp functions; and

•      Volume (Vol) study.

These charts are available through API and RTD.

Calculation

If the close is higher than the previous RenkoHigh, then the current brick is green/up, where RenkoLow = previous RenkoHigh and RenkoHigh = Close.

If the close is less than previous RenkoLow, then the current brick is red/down, where RenkoHigh is previous RenkoLow and RenkoLow is Close.

If the close is within the range of the previous brick, then the current brick shares the previous brick's color, where RenkoHigh and RenkoLow is Close.

The first brick of the session is drawn from open to close.

•      Green/up if close > open

•      Red/down if close < open

•      Black if close = open

If the first tick of a new session is greater than the previous RenkoHigh, then the last session brick is green/up. 

If the first tick of a new session is less than the previous RenkoLow, then the last session brick is red/down.

If the first tick of a new session is within the range of the previous brick, then the last session brick shares the previous brick's color.

Wicks

The Show Wicks parameter allows you to add wicks to Renko bricks, indicating actual highs and lows within a brick in addition to RenkoHigh and RenkoLow.

Hollow Bricks

A hollow brick indicates that the brick is not completed. This occurs when a session ends and the last brick remains incomplete or when the current brick hasn’t been completed yet.

Price Gaps

Because bricks are created only if the price is out of the range, a single brick may cover, for example, a minute or several hours depending on market volatility. On the other hand, during the periods of high-liquidity, the price may quickly change by a multiple of the specified tick/price range. In this case, Renko chart might show a long trend of several bricks going upwards/downwards from the previous close. However, those are not "real" bricks that can be traded as they were created at the same time to fill in the price gap. We refer to such bricks as null bricks as they have no actual trade volume.

You can suppress the generation of null bricks using Max Null Brick parameter. Depending on the value of this parameter, null bricks are combined into one elongated brick with the size equivalent to a sum of the individual null bricks. This method effectively compresses fast market price moves.

For example, a 1-tick Renko with a 5-tick price gap, e.g., price jump from 13.01 to 13.06:

•      If Max Null Bricks = 200 then close current brick 13.00-13.01, show 4 null bricks 13.01-13.02, 13.02-13.03, 13.03-13.04, 13.04-13.05, open new real brick with current high = 13.06.

•      If Max Null Bricks = 0 then show no null bricks, close current brick 13.00-13.05 and open new real brick with current high = 13.06.

•      If Max Null Bricks < 4 then we estimate that 4 null bricks are going to be generated, as Max Null Bricks < 4, we won’t generate null bricks at all and will behave as if Max Null Bricks = 0.

•      If Max Null Bricks >= 4 then we estimate that 4 null bricks are going to be generated, as Max Null Bricks is >= 4, we generate all null bricks as if Max Null Bricks = 200.