Price changes that don't clear this hurdle are ignored. This filtering out of smaller price movements keeps the focus on significant moves and helps you disregard noise. This is quite different to a regular chart, with which you always get a new bar as time progresses. With the Renko indicator, you only get a new bar plotted if the price change meets your set requirement. Renko charts plot blocks also known as bricks of a certain fixed value in terms of price movement.
Using a Renko chart with a block size of 20 pips would allow you to see what you're really interested in at a glance. Doing so allows you to more readily recognise trends and even identify possible support and resistance levels. MetaTrader 4 comes bundled with a reasonably solid selection of indicators. Unfortunately, Renko Indicator is one of the tools missing from the standard package.
If you are looking to use the Renko indicator in MetaTrader 4, you're going to have to delve into the world of custom indicators. Custom indicators are those that have been created by users coding in the MQL4 programming language. The vast spectrum of indicators opened up by the possibility of users coding their own tools is one of the great strengths of MT4.
Needless to say, the quality of these indicators can vary greatly, depending on where you obtain them. Well, the best Renko indicator for MT4 will be the one that comes from a highly-trusted source. This is why you should consider downloading MetaTrader 4 Supreme Edition. MT4SE is a custom plugin for MetaTrader 4 that has been carefully developed by a team of industry professionals on behalf of Admiral Markets.
Not only does it include an extended selection of indicators, but also boasts additional features, such as a Trading Simulator , a bespoke Trade Terminal , and a live news feed. If that sounds interesting, click below now to get your free download of the MT4 Renko Indicator. Double clicking on Admiral Renko launches the custom indicator and allows you to tweak the settings to your preference. Some of the default values are shown above.
Probably the most important setting for the MT4 Renko indicator is the block size and the colours displayed for the up and down-blocks. You can see that the default value for block size is 10 pips for Renko Forex charts. The default colour for the Admiral Renko indicator is blue for up-blocks and red for down-blocks.
Now for my MT4 Renko chart, I chose to make the up-blocks green, just because I find it easier to see with the colours I use for my regular candlesticks. I also changed the block size to five pips for this example. The green up-bricks appear when the price has moved up by the specified amount — in this case, five pips. Similarly, the red down-bricks appear when the price has moved down by the same specified amount. The dotted horizontal lines on the far right of the chart show where the price would have to move to next for new bricks to appear.
Notice how the MetaTrader 4 Renko bars tell a much simpler story than the normal candlesticks. Many Renko indicators do not allow you to plot the blocks directly on to your price chart. The Admiral Renko indicator does give you this functionality, which can be useful for easier comparison.
Admiral Renko also allows you to plot Renko candles as a separate chart, displaying the classic Renko look as we will discuss below. An alternative way to present the information is to view the Renko candles on a completely separate chart.
Doing this requires a few steps. Let's run through how to plot a separate Renko chart for MetaTrader 4. The time frame of the chart doesn't really matter as you're going to be creating a separate chart. All the settings for the new chart will be driven by the values you enter into the Renko charts MT4 indicator.
You then need to edit Admiral Renko in the indicator list accessed from the Chart tab. You need to enter a value for the offline chart period that is different to the standard MT4 chart timeframes. I have used six above, with Build Renko charts data set to M1. This means the offline chart will be an M6 chart. You then need to click on the File tab and select Open Offline. From the displayed list, select the relevant chart, as shown in the image below:.
In the Renko chart shown, the solid white blocks represent the downward movement of the required magnitude, while the empty blocks represent the upward movement. This is the standard Renko appearance, with bricks of identical size zig-zagging on the chart.
At the most basic use, Renko charts simply make it easier for you to see the state of the market. For example, a sequence of consecutive down-blocks makes it easy to confirm the market is in a downtrend. A simple trading strategy that attempts to follow the trend is to take each block as a directional signal — an up-block representing a buy signal, and a down-block, a sell signal.
The moving average looks back at the Renko values — i. Here, we can use the moving average in combination with the Renko blocks to provide trading signals. When the Renko blocks break under the moving average, it is a sell signal. When they break above the MA, it is a buy signal.
Renko in MetaTrader 4 is a reasonably versatile tool, and its application is constrained only by your own inventiveness. The simplest use of Renko is to allow you to see very easily that the market has moved a significant chunk.
How large that significant chunk needs to be is ultimately up to you to decide. If you play around with the settings, you will readily discover what works more effectively for you. The best way to explore this is, of course, with a Demo Trading Account , where you can experiment to your satisfaction without taking on any risk. As we saw above, using a simple moving average, you can quite easily come up with new applications by combining Renko charts with other indicators.
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