In the previous article, we covered the basics about the Median Renko charts and also illustrated some differences between the median Renko charts and the traditional Renko charts. With a clear understanding of how the Median Renko charts work, in this article we illustrate a rather simple trading strategy.

The success of this trading strategy relies primarily on the basis that trends are are a lot more easier to be visually identified with the median renko charts. The Median renko engulfing bar strategy is also a very short term scalping strategy.

The Rockin Renko Trend Forex Strategy by Krystal Comber

As and when signals are generated, we enter and exit the markets with a few pips of profits in the pocket. For the charts, we make use of the Median Renko Charts, which can be downloaded from here.

Based on the instrument or market that you wish to apply this trading strategy to, the pip size can be changed. For the majors, a pip size of 20 — 50 should suffice and for trading indices, a pip or a 10 point box size is very ideal. Once the indicator is set up and the offline chart generated, your chart should look like the one below.

Median Renko Engulfing Bar Strategy — Chart Set up. For the buy sell rules, we simply look for engulfing bars. For the sake of clarity, an engulfing bar is one whose highs and lows completely engulf the previous bar. There has to be no spike in any direction with the previous median renko bar. Median Renko Bar Strategy — Strong and Weak Signals. So to summarize, we only look for strong engulfing bars with the Median Renko chart. Once we identify the strong bars, we place a pending sell order at the low or the high of the previous bar with stops at its high or the low.

Median and Turbo Renko plug-in for Metatrader 4 & Metatrader 5 – Forex Trading Tools | Metatrader tools & plug-ins

Two units are opened, where the first position is closed at 1: The first chart here shows an example of a Buy Order set up using the Median Renko Engulfing bar strategy.

Median Renko — Engulfing Bar, Buy Order Example. Click on the picture above in order view the notes on the chart.

The basic essence of the above example can be summarized as follows:. The next chart below illustrates a sell example. Median Renko Bar — Sell Order Example.

Median Renko Charts - Engulfing Bar Strategy

This strategy is actually quite robust and comes with a tight stop loss 5 points or equivalent stop loss.

By booking partial profits at 1: This strategy is beneficial for traders who merely want to make money and do not want to bother too much with the trends or other market factors. There is also no requirement for traders to consider other variables such as indicators or even fundamental factors. In the above examples, we have illustrated this simple yet robust strategy that losses only 5 points in the German DAX.

Of course, this can be applied to the currency markets as well and works just the same. This means, having to spend a little time experimenting with different Renko box sizes.

Hi, thanks for sharing! I think you mean the entry should be 1 bar after the engulfing bar right?

You need to wait for the engulfing to be confirmed no? Hi Mike, yes we wait for the engulfing bar to close and then enter on the next bar. Is there a way to help determine a Box size that will give more Retracement Entries? You should take a larger box size. This is subjective and based on your comfort level. Last but not the least, you will see false signals. The trick is in having patience to wait for the engulfing pattern to emerge after a period of strong trending move.

There are a lot of problems with this article. On the example for the buy order, it goes right up to a strong renko engulfing bar for a sell and then rotates back up. The vice versa also happens for the sell trade where chop comes in. So dont trade these blind. Put entries into context. You would instead have to enter at-least one tick above where the current engulfing bar would close.

Which makes me think the person who made this diagram never traded it live and just started drawing stuff. The last error is the weak candle in the middle of the trend. No one knows when the middle of the trend is when trading live so thats only something that can be seen in hindsight which renders it completely useless.

From your comments, I get the feeling you are looking to buy or sell whenever there is an engulfing candlestick. I wish it was that simple.

If you look at the chart carefully, the correction is where we booked profits, and did not enter. Example, as per the buy ex, price falls, then makes a bullish engulfing. If you look at the charts, there are many such signals. However, in the first chart, I pointed out how the strength of the engulfing signal is determined based on the wicks. You simply do not buy or sell just because you see an engulfing pattern, but in addition to point 1, you also consider how large the engulfing wicks are.

Short entry because the bearish engulfing came after a period of uptrend. We get another short entry at the same price as signal 1, which is exited after the first bullish engulfing marked by the ellipse. Remainder of signals were not taken as the markets was sideways. This strategy has never been used in real trading. How do I know?

I trade Renko and Mean Renko bars live and you cannot possibly buy at the prior candle hi AFTER the engulfing candle has completed as shown in the example. Any backtesting on this strategy will have given a false positive expectancy.

You cannot know that an engulfing candle has truly engulfed the prior candle UNTIL it has closed, since during the candle formation price fluctuates up and down until it closes. I know this from backtesting Renko for years and trading live Renko bars, including Mean and Custom Renko bars. Not sure what your back testing methods are but here are a few examples to show you where prices retrace back following the engulfing candle to pick up the entry.

Do you think this strategy would work with regular Renko? Hi Mike, yes it works with regular Renko too provided you have the wicks enabled.

Home Renko Basics Renko Strategies Analysis Renko Chart Software Forex Brokers Free Renko Charts About Contact. Facebook Twitter Google LinkedIn Email Print. You might also like to read Difference between Median Renko and Regular Renko bars.

Or do you get enough signals and entries per day? Reply Chartist Ranga please. There are 3 factors to consider when taking a set up. To clarify, Signal 1: Follow me on Twitter. Copyrights - The information provided on this website is purely for educational purposes.

Trading the financial markets is risky and you could lose more than your deposited or invested amount and it is therefore not suitable for everyone. Please consult with your financial adviser before trading. Send to Email Address Your Name Your Email Address jQuery document. Sorry, your blog cannot share posts by email.