The author and the publisher disclaim all legal or other responsibilities for any losses which investors may suffer by investing or trading using the methods described in this book. Readers are advised to seek professional guidance before making any specific investments.
04 | Chapter 1.2: Renko Trading Strategy
Brick Value As mentioned earlier, Renko charts are categorized as noiseless and what makes them so is the appropriate selection of the brick value. In the example in Figure 1.7, the brick value used was 5 points, which is the difference between each brick. The brick value selected defines the price action which the user considers is significant enough to be captured in the chart. In Figure 1.7, for example, a brick will be plotted only when the price has moved by at least 5 points, or multiples thereof. So if price moves from 100 to 105, a bullish brick is formed. A brick will not be formed if the price is even one tick below 105. Accordingly, if the price is at 104, the Renko chart will not plot anything. Thus, the defined brick value also determines the frequency of bricks and the noise that we want to eliminate. Renko charts can be drawn by using different brick values but the principle remains the same. Later, we will discuss how best to decide what the appropriate brick...
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