Discussion about Renko : (from Varun's thread)

[doss186]

Here I tried to fix some issues of repaint, Test this version and valuable suggestion are welcome for improvement.

 

[Tuna]

Yes I have also seen it. I guess with every new input value AFL is recalculating all the data in past. So charts keep on changing plotted bricks, instead of all previous plotted bricks being static they are dynamic. Actually only current brick should be dynamic.

you can not do that, the essense of Renco is the brick size have to be same. Now if you use static brick size, on TF (1 min, 3 min, 1 HR etc) completion, the past Renco won't repaint. But if you use a dynamic formula for calculation of the brick size, then it will repaint.

Anything other then this, you can develop a system which will show the chart with Renco like bricks, but that is anything but Renco.

 

[doss186]

you can not do that, the essense of Renco is the brick size have to be same. Now if you use static brick size, on TF (1 min, 3 min, 1 HR etc) completion, the past Renco won't repaint. But if you use a dynamic formula for calculation of the brick size, then it will repaint.

Anything other then this, you can develop a system which will show the chart with Renco like bricks, but that is anything but Renco.

Sir can you test run this on 3min chart. BNF 10bricks

 

[timepass]

Sharekhan's Tradetiger seems to use 10% ATR(14) as the brick size.

 

[Tuna]

Can not do Bro. Ask MB. I don't use AFL.

 

[Tuna]

Sharekhan's Tradetiger seems to use 10% ATR(14) as the brick size.

ATR one is one of improvised one for Brick size calc, has been in market for sometime. It is good in a way as it takes care of the volatility and changes brick sizes accordingly, but the issue is repainting. A Brick size change even by 2 point (for 10 point brick size) is almost 20% extra.

As I told, I have used Renco for long time (more than 6 years), the best use of it is, to find point of reversal and possible support and resistance. Never use Renco for Intra trading. You can use for higher TF (1Hour, 4 Hour, 1 day) only till ADX > 20 , helps in riding the trend.

If someone disagree, do one simple thing - run a backtest in lower TF (< 15 mins) and the result will be in front of yours to find the win rate & rr.

 

[Tuna]

Don't want to discourage you guys as you are trying to build something different. But let me tell you one thing. In trading, there are two worlds :

1. Mechnial Trading
2. Discreationary Trading (with or without indicators)

- Both Regardless of the TF

Decide which side you want to join. if you say mechnical (anyting like CCI, STI, OBV, FCB blah Blah), create rule, create the AFL and run a 5 year back test, and share it.

Do it for 1 min to 1 hour (or 1 day) : Result will be in front of you, if it makes sense to track the system every minutes or occasaional view of 1 hour is enough.

On the other hand, if you have a system, but you take the liberty to make a entry (and saying I did this because, so and so and so), but there was no AFL trigger, buddy, you are as good as a non-mechnical trader. Don't give excuse of system in that case.

I belong to second catagory. I don't know about others. Being pure mechnical is my dream, but I never could build a system which gives a consistent profit like second cat of trader.

Issue with second catagory:

• There will be days you will make bad choices and suffer.
  
• You should know if you are seeing a lossing streak (weekly stop, monthly stop)
• You have to develop the ability of ending the day in loss and closing the terminal quitely

difficult part. You are the AFL here. And you will develop bug as you are not the same 'you' everyday. So I don't encourage anyone to opt for second catagory either till you have a profitable AFL. Second catagory is for the master leage and I am still in the level of a watchman, only good thing, I am inside the gate of the campus. LOL.

Anyone, telling his is using his system for trading - code ,backtest and share the result (5 years is a decent period). Let all see the winrate / rr and decide if it is good system to use.

The worst sin is fooling self and others telling I use a system, but actually taking discreationary calls. Don't do it.

 

[Tuna]

Sorry for long post, but could not resist myself from sharing my view guys. The second post, please bear with me (hopefully the last one).

What is trading? It is 'Dhanda'. Business. Earning is difference between Entry and Exit + Direction being in your favour. The only thing (trust me), the only thing that holds good in trading always, is S & R --> Support And resistance. If you really want to build something, try this (You can use anything, CCI, OBV, STI etc):

1. Is there a disagrement between the price & your indicator (which is supposed to trade in direction of the price)
2. Is it happening near a known point of S & R (FCB is beautiful tool, EMAs can also be used, like Varun does)
3. Is the failure point clearly identified (the place where the SL should be)
4. Most important part --> the exit conidition, the biggest problem of code based system. You can try RSI ,50 cross to exit buy etc, but it is sub optimal. This is the most critical part. If you can address this. you are done. Entering the market is not difficult, the exit is where we get the 'Pitaji ki Maafi' from Market.

I am coder (my league hates to use this word, so they calls me technical specialist) for some 14 years. And probably explored all the avenue of code based trading I could have done. So I am aware of all the drawbacks I suffered.

The job is trading is "predict the future" & Repeatedly. And among all setup I have played, only 2 concepts shows maximum repeatibility:

1. A pullback during a strong trend, turning in direction of the trend, the pullback should stop pulling back further at the known areas of S&R, you enter and enjoy the wave3 of the trend

2. Divergence - Price should not agree with something - it could be volume(OBV, WADV), strength (RSI), Momentum (Stoch), Rate of Change (ROC, CCI) or Volume + Strength (MFI)

Babu Rao: Ye Tuna. Bas kar re baba. Aur ye baki log, next time mera system mera system kiya na, to back test ka result daalo. Live trade dikha raha bolke discreationary trade ko mechnical trade mat banao. On hinds eye everything is rossy, the real result of the code is in its executions. So banao AFL aur chalo Back test. Jab dil shaant ho jaye ki bhai bahut hua tab rok na.

This is what you will find (let Tuna Predict):

1. A system with high win rate & high frequency (more trades), will have low RR (lower profit on winning trade compared to loss on the losing trade)

2. A system with high RR and High Win rate will have low frequency (matlab, you need a job buddy or huge amount to play with so that even 3-4 trade a month can take care of your monthly expense)

3. A system with high frequency and high RR will have pathetic win rate (2 out of 10 trades are winner)

Ideal system (mechnical, if anyone disputes it, dont give excuse of trades on bloggs, show backtest result, in mechnical world, we are mehnical - no middle path plz):

Code based system (which can be back tested + 0 discreation) with High win rate / High RR/ High Frequency - does not exist.

Prove me wrong - I will quit coding and sell banana in front of laalbag.

 

[monkeybusiness]

Sir can you test run this on 3min chart. BNF 10bricks

Doss Bhai,
check param settings, kept brick size 10 and TF 3 minutes. will post feedback in couple of days.

 

[primitivetrader]

seriously ppl are making money with this renko and all ? even tht is also not proper and forcing it on time based chart where as the base is tick independent of time. seems like lots of intellectual mast***tion going on in this thread.
hope fully ppl here are enjoying it .

apart from ranko there are kagi,threeline blah blah. at least one thread must be there for such stuff also.