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Renko

A Renko Strategy for Trading - Part 3This is intended more as educational material on a strategy for using renko charts. To begin with, I'll be using USOil in the examples but will include other markets as I continue through the series. The material is not intended to prescribe or recommend actual trades as the decision to place trades is the responsibility of each individual who trades as they assume all risks for their own positions and accounts. Chart setup: (Part 1) Double Exponential Moving Average (DEMA) 12 black line Double Exponential Moving Average (DEMA) 20 red line Parabolic SAR (PSAR) 0.09/0.09/.23 blue circles Simple Moving Average (MA) 20 blue line (Part 2) Stochastics 5, 3, 3 with boundaries 80/20 dark blue/light blue Stochastics 50, 3, 3 with boundaries 55/45 red Overlay these two on one indicator. Refer to 'Part 2' as to how to do this (Part 3) True Strength Indicator (TSI) 14/4/4 dark blue/ red Directional Movement Indicator DMI 14/14 ADX-dark green, +DI-dark blue, -DI-red
FX:USOIL
by mxb1961
LTC Renko decending wedge shows potential bottom and priceLooking first to the left on this daily extending back, there isn't much left to the imagination on the left side. The real question is whether a higher low here will signal a breakout above the wedge. Whether this happens may depend on how much truth there is in the BTC parabola. It's not shown here, but if memory serves, if we range from this point for a couple of weeks, and if the market behaves as the parabola says it should, the tangent will raise the bottom for all coins regardless. Failing that, this wedge at least provides a view of a long term trend support which, though very low against expectations for this cycle, will likely, for what it's worth, remain unchallenged.
by latticephreak
BTC Daily - Renko, MA (20,50,100,200) & DMIOverall Summary: Overall I am bearish. Bitcoin is trading in the $3600 to $4200 range during the last week, 81.5% down from the ATHs, with a market cap of $63 billion. The chart indicates a continuation/consolidation/reversal of the current X trend. The price is closest to the 50 MA with a trend towards the 50 MA. The volume has decreased over the last week, which is supporting the current price action. During the period the ‘dominant’ DMI switched over and it is now the -DMI and a weak trend strength ADX of 19. Detailed Summary: This chart uses weekly Renko Candlesticks with 4 MAs (20, 50, 100 & 200) & DMI. Renko candlesticks are great for trend trading. Renko means ‘brick’ in Japanese because the candlesticks represents only price movements. Although some price action is missed, Renko makes it very easy to identify key trends and support and resistance areas. This chart style is often used along with Heikin Ashi candlestick charts for greater confluence. As you can see, there is very little ‘noise’ in this style of chart, allowing traders to ignore short term trends. I set the security at $50 per block so that every block represents a $50 price move. During the last week the price has ranged by $500, opening at $4100 and closing at $3600. The price has decreased over the period which is a continuation of the long term price trend. Moving Average are also used on this chart to help identify major areas of S&R and general price trend action. I prefer to use simple Moving Averages on the daily time frame. The 200 MA is red, the 100 MA is orange, the 50 MA is yellow and the 20 MA is green. The choice of colours helps me to read the chart and see if price action is bullish or bearish. For example, if the red is on top and the green is on the bottom, it is clearly bullish. It is also important to note that the longer the Moving Average period, the stronger the support and resistance. During the last week the price is closest to the 50 Moving Average and during this period it has trended towards/around the 50 Moving Average. The 50 Moving Average is currently acting as resistance while there is no MA acting as support. The key Support area is $3300 and key Resistance areas is $4200. I forecast in the next week that price will test the next support area. Volume is a key indicator that I use to understand past, current and possibly future price action. Unfortunately a majority of the exchange volume is fake ‘wash’ trading so it is important to rely on data from reliable exchanges like Binance and BitFinex. Volume that supports price recent action helps strengthen my belief in a specific trend. During this period volume has decreased in convergence with the recent price action. On a longer term time frame, the volume is in convergence with the long term trends. I forecast in the next week that volume will decrease and this will support a decrease of price. DMI (Directional Movement Index) is a popular trend trading momentum indicator that measures Moving Averages and is able to identify trends while ignoring ‘noise’. It is used on combination with other trend indicators to build confidence about price actions and trends. Look for divergence and convergence between these three lines: Green is the +DMI or +DI, represents bullish action, Red is the -DMI or -DI, represent bearish action and Yellow is the ADX , is an average of the above two and sums up the MA trend. At the start of the period, the ‘dominant’ DMI was the + DMI, at 41 while the ADX was at 18. During the period the ‘dominant’ DMI switched over and it is now -DMI and the ADX is 18. This indicates a convergence with the long term price trend and a weak trend. I forecast in the next week that the that ‘dominant’ DMI will increase and this will support a decrease of price. References: Renko summary - www.investopedia.com Moving Average summary - www.investopedia.com Support and Resistance summary - www.investopedia.com Fake exchange volume summary - www.blockchaintransparency.org DMI summary - www.investopedia.com
BITFINEX:BTCUSDShort
by CarbiArbittrage
NEUTRAL 1D Renko Chart with CM_Trendbars, EMAs and a custom DMIThis is a 1D BTCUSD (BitFinex) chart using Renko Candlesticks along with a CM_Trendbars (add on), 4 EMAs (9,15,21,55) and a custom DMI - with a focus on the last month of price action. Renko Candlesticks patterns come from Japan and Renko means ‘brick’. They are a cousin to the Heiken Ashi candlestick patterns, using weighted calculations of the OHLC (Open High Low Close) but without the time. So in simpler terms, they focus on price trend expressed in price blocks ($50 USD for BTC), rather than time and volume. As a result, Renko charts are great at reducing noise and allowing for only the strong trends to be clearly visible on the chart. Trend traders often use this chart style in conjunction with other charts styles and indicators, to clarify the strength and direction of a trend. BTC hit a 2018 low on the 14th of December, ending a year long bear market that has shredded the market’s confidence (and wallets). The current bottom, which may or may not go lower in 2019, came ironically a week before Xmas. A gift of not, there are two ways to look at it. We then saw a weak bounce of around 3300 with a price trend that grew in strength as it broke through the 3600 S&R level. Two days later on the 20th of December, price had hit the next major S&R area of around 4100 and clearly got rejected. Since then we have seen three tests (rejections) of the same price level, on the 22nd, and 28th and now on the 2nd of January. Three tests in under two weeks demonstrates that there is clear indecision ATM in the market. It is worth noting that Christmas and New Year typically affects the market, as trader's go on holiday and take out money to spend. A clean bullish break could see prices quickly reach around 4450 area and increasing confidence that the market has bottomed out. A weak rejection and further sideways movement would strengthen the case for the bulls, and we could return to ATL of 3300 fairly quickly. Looking at the CM Trendbars, which is an indicator added on top of the Renko candlesticks that 'colour's the bars depending on the strength of the price action, I read them as slightly bullish in the short term but clearly we need confluence from other indicators. Moving Average are also used on this chart to help identify major areas of S&R and general price trend action. I prefer to use EMA (Exponential MA), over the non-weighted (Simple MA) because it adds more significance to recent price action over older price action. This provides a more responsive indicator, telling me when a significant trend change is occurring earlier. I have for EMA, 4 based on the Fibonacci numbers; 9 (green), 15 (yellow), 21 (orange) and 55 (red) day time frames. And a 200 day MA (purple). The choice of colours helps me to read the chart and see if price action is bullish or bearish, for example when the green line is at the bottom, followed by the yellow, orange, red (and then purple) it is clearly bearish. Not that the 200 EMA is essentially for identifying long term trends, but I focus on the 9-55 period for trend trading, especially the 21-55 day for multiple week trades. The last time price crossed the 200 EMA was on the 2nd of September and the 55 EMA on the 18th of October. So the market was expecting a price retrenchment in December. Whether this is just a retracement, before we see the downtrend continue, is not yet clear. What is clear is that we saw a bullish bounce since December 14th with the 9, 15, and 21 crossing over within a week. The 9 day then approached and briefly breached the 55 EMA before dropping below it again since the 25th of December. The MA have since continued to consolidate as we have seen price action tighten around the 4100 S&R levels. This types of MA consolidation is another indicator that the price direction and strength is undecided by the market. The final indicator is a custom DMI, which is a suitable tool to add alongside the Renko chart and 5 MAs, as it measures the MA of a price change over a given period of time. It is therefore another great tool for identifying trends, and helps to build confidence about price action and trends. We are looking for divergence and convergence between these three lines: - Green is the +DMI or +DI, represents bullish action - Red is the -DMI or -DI, represent bearish action - Yellow is the ADX, is an average of the above two and sums up the MA trend. The ‘dominate’ DMI has been the -DMI since the start of November, reaching a strength peak of 94 on the 24th of November. Since then we have seen a sharp decline in the strength of the -DMI with a cross over of the ADX on 3rd of December. Although we saw the -DMI ‘dominate’ again a week later it crossed over at 49. In the last month the market’s indecision has been clearly demonstrated by six ‘dominate’ crossovers. At the same time all three lines continue to decline with the ADX now well below 25, at 16. When the market is moving sideways and below 25, it is risky to trend trade. On the flip side, the longer the market continues to consolidate in this range, the larger the price action will be once it breaks out (either up or down). In combination, the above indicators tell me we have experienced significant bullish price action in December and now the market is consolidating and moving sideways at the 4100 level, below the 55 MA, and with a declining ADX. In the current market, trend trading is unattractive, so I have to wait for a clear breakout either on the up or downside. I am inclined to remain a little bearish ATM and believe we could see price move back down again to the low 3000s range if the bulls are unable to gain more momentum soon.
BITFINEX:BTCUSD
by CarbiArbittrage