Choosing the right tool to use in forex trading is very important thus it is worth to discuss the most popular chart use by most traders today and that is the Forex Renko Chart. The name Renko gets its name from a Japanese word renko meaning “bricks”. If you encounter a Renko chart you will see a colored brick instead of a line. The Forex Renko Chart help in trend trading if you are a trend follower. The goal of this strategy is help traders in spotting potential trends and instructing them the key levels to join the trend. Of course, analysis still plays a big role. One benefit Renko chart can offer is that it can screen out minor price movements within any major trend which is very helpful when planning out analysis.
This kind of chart is concerned with the price movement not with volume or time. Renko chart is made by placing a brick in the next column when the price exceeds the top or the bottom of the last brick set by a predefined amount. There are several colors use in the bricks, a black brick means a trend is down while a white brick means the trend us up. This kind of chart is very effective in determining support or resistance levels. If the direction of the trend changes then, there will be transaction signals through changes in the bricks color. If there is a reversal in the basic trend then you will see a green or red brick in the chart. A green brick signals the start of a new uptrend while red bricks signals the start of a new downtrend.
Since Renko chartpresent trends direction pretty well, there may be times when the chart gives signals near trend exhaustion. But it is expected that most of the time, traders could follow major parts of the significant trends. One advantage of working with Renko chart is that it is not complicated and is easy to understand. For beginners in forex trading, Forex Renko Chart is a big help.
One traita forex trader will need to develop using Forex Renko Chart - patience. You definitely need patience and self-discipline when you start Forex trading. The more that you have to stretch your patience and disciplined when you work with Forex Renko chart. Why is that? This is one drawback that most traders have to say with Renko chart, you do not know when the next Renko box or candle will form. Unlike the Japanese candlesticks chart you get a new candle in every five minutes. But with the Renko chart you get only one candle in the whole 2 days in period where market is expecting a huge news release.
So it takes a long time before you can actually determine a trend thus it takes time too to place a trade. However the chart is found to be quite accurate although as most traders would say, in trading you are not assured of hundred percent win. But it is worth to use the best tool for you to make right trading decisions.
For limited time only, Metatrader 4 or Mt4 forex traders can get access to a free renko chart. The chart comes in the form of an mql4 indicator which is a popular format for forex traders trading with Metatrader 4 platform. The forex renko chart comes with a manual pdf and online support helpdesk to assist traders on installation and indicator usage. Visit this link to find out more .