Renko charts are pure price action charts without time factored into them. Unlike regular time charts that draw a candle/bar after a set interval of time, a renko chart will only draw a block when price has moved a certain distance in price. This distance is also known as the block size. You can customize renko block sizes to your preference with the attached Expert Advisor (EA) at the bottom of the page.
Below is a GBP/USD renko chart with a block size of 10 pips.
There are several different renko strategies. Some strategies take support and resistances on the renko chart into account. The renko strategy I am presenting will not factor in supports or resistances. The strategy I present will be based purely on the most recent direction in price.
Trade entry occurs after two consecutive blocks are drawn in the same direction. The entry (buy/long or sell/short) will also be in the direction of the two blocks drawn. See examples below.
Exit and reverse trade on opposite signal. The most you could lose on one trade are three blocks worth of pips since the block you entered on does not draw in the opposite direction (side by side). As a result, you should calculate your max risk based on the pip total of three blocks (position size calculator). There is another renko Expert Advisor (EA) available that does draw reversal blocks side by side, but it is not to be used with this strategy.
+480 pips and counting (not including spread or swap) in 2 weeks (and on only one currency pair). Not too shabby!
I have attached a MetaTrader Expert Advisor (EA) for renko charts below. In order to view a renko chart, place EA on a 1 minute chart of pair you wish to trade. Make sure "Allow live trading" and "Allow DLL imports" boxes are marked when EA is attached to chart (again 1 minute). Also be sure that EA is active (button above chart is green, not red). Once prompted to open offline chart in upper left hand corner of the chart, go to FILE > OPEN OFFLINE > M2 CHART.
Download: Renko EA