Renko Chart

A Renko chart is kind of like a candlestick chart, except...different. Replace the candlesticks with bricks, make the bricks very brick-orderly, and change the math to price movements only...and voila: Renko chart.

What does “brick-orderly” mean? You know how bricks are evenly spaced, and how the next layer of bricks on top is placed so that the middle of the top brick is above the mortar in between the two lower bricks? That’s what Renko charts look like. Each brick isn’t placed like candlesticks, with giant ups and downs, or right next to each other. They’re laid like bricks, always 45 degrees above or below the last brick.

Every brick is either green or red, signaling bulls (upward price movement) or bears (downward price movement). The box size, which is shown in brick size, represents price.

Renko charts are designed to filter out the noise that’s in traditional candlestick charts. Movements are only included in the Renko chart if the movements are extreme enough. A new brick can only be laid if the price change surpasses the top or bottom of the last brick’s box size.

Think of Renko charts as streamlined candlestick charts...nice and bricky.