Renko Charts – Which box size is best for forex trading?
My most frequently asked question about Renko Charts is: What box size should I use? In this article, I will explain why the only honest answer I can provide is "it depends."
But first, just to make sure this article makes sense, let me briefly explain how Renko charts work.
A new blue (bulb) candle will be formed when the price moves up the specified number of points. However, if a new candle is opened (we say the box size is 10 points), then the price drops 20 points, and a new red (bearish) candle will close. This is because the price must move 10 points above or below the last closing price to show and close a new box on the chart
What makes the Renko chart so appealing to so many traders People … lack of wicks and lack of many candles can not go anywhere but this leads to your various indicators sending out a mixed trading signal, none of which has any validity
Learn how Renko candles form and close Then we have a common question: Which box size is best when trading a Renko chart?
As mentioned above, the only honest answer is "it depends" on what it depends on
Some traders are best suited for long-term traders. They tend to focus on hourly or 4 hour charts and observe new trends as soon as jumps are said, trends are detected and suspended as long as they can store the maximum number of points
These types of traders should use Larger box settings, such as 25 or 30 points. If the price rises 25 points and forms a new box, it must move down 50 points to open a new box in the opposite direction. If you are familiar with trading pairs, such as EUR / USD or GBP / USD, you realize large price reversals such as these do not happen often. Once the trend is established in one direction, the trend will usually last 100-200 points. Using a large box setting such as 25 or 30 will eliminate the counter signal you may get before using the 1 hour or 4 hour chart (these signals cause you to exit the transaction early, another big move in your direction)
Other traders are more likely to be scalping scalps and you can move the types of quick profits in 5-20 pip. By using a 3 or 4 point box size setting, these traders see each miniature trend in the gold position as it is formed and can be bought multiple times in any given hour of London and New York trading hours, each 20 points Profit
When I answer the question, "Which box size should I use?" My answer always requires traders to perform a little self-analysis and determine whether they are long-term traders or scalp. Once I know the answer to this question, I can give them a more specific answer than "dependency".