Discussion about Renko : (from Varun's thread)

[Tuna]

Nice Post

but why Kela, better things to sell in Lalbag


Happy

I will sell Kela because the whole world will go absolutely 'Banana' they day we develop a system with all the 3 axes of trading at max level

High RR/ High Win Rate/ High Frequency

 

[Tuna]

Well, maybe a case of small mouth, big talk. But I have been looking at Renko trying to combine it with something else, using Kite.

View attachment 22312

There that ema(36) in blue to indicate the major trend. Then there is ema(5) in white and ma(5-time series) in yellow. Theoretically the crossover of the two 5ma gives you the trade signal, in the direction of Renko.

Then why you need the renco? You can use vanila 5 ema / 36 EMA crossover na?

 

[timepass]

Then why you need the renco? You can use vanila 5 ema / 36 EMA crossover na?

Renko.. the visual is more appealing Yes, plain vanilla 5/36 works, but the stoploss may become too deep for daytrading futures.

 

[doss186]

Renko.. the visual is more appealing Yes, plain vanilla 5/36 works, but the stoploss may become too deep for daytrading futures.

Try crossover of DEMA 8 open, DEMA 13 close

 

[timepass]

Try crossover of DEMA 8 open, DEMA 13 close

Let's see it from the viewpoint of a daytrader - trading something having a lot size of about 5000, stoploss of about 30-40 paisa, and a similar target. All he needs is 1-2 renko candles. His enemy is the reversal.

 

[Tuna]

Renko.. the visual is more appealing Yes, plain vanilla 5/36 works, but the stoploss may become too deep for daytrading futures.

That't true. This what I read somewhere. if you take any tehnicals developed in Japan (be it Heiken Ashi, Renco, Ichimoku) all have some sort of visual cues. This is the eastern world mindset of trading as they termed it.

The western world believes in data crunching and making it precise. They had these 3 axes - Win Rate (%), Risk Reward (RR), Frequency - to measure a system.

It is easy to fall for a visually apealing system as in the hinds eye you will see that you have nailed almost all the winners. But trust me, it wont work.

Ok, now lets get real. Since you guys have gone from Kannya Kumari to Kashmir, let me give you a simple Renco trading system.

• Indicators (34 EMA, 200 EMA), TF based on your choice.
• Renco Size (use the automatic one from Kite, and then round it to fix value). You can use the box value from Trading in.com as well.
• ADX (only the ADX, dont need +DI ,- DI)
• Concept- Trading the pullback with breakout of consolidation zone
  
• Trading style - discreationary, if you can code great, doable.

Setup: Draw the chart and plot 34 EMA. and 200 EMA. We will take only long as long as 34 EMA is above 200 EMA and ADX > 18. For short, same only difference 34 EMA, below 200 EMA.

Long Entry: Wait for a Red Renco to completly form. There may be 2,3, 4 red rencos, does not matter. Once you see the next green renco (wait, dont enter), get ready. Draw a rectangle upper line last green renco high, lower line at low of last red renco.

We will go long once the green renco closes above this rectangle and hold till the next red renco is formed.

Short entry , same game - reverse.

I can explin divergence trading with renco as well, but first practice this.
+ Best of luck.
The Fake Trader.

 

[varunkochhar]

A few days earlier i had mooted the idea of overlaying the vksl on these renko charts. Someone objected saying that renko is independent of time. My submission is where does time come up in VKSL. You can plot it off the 1min/5min/15min TF. The line should still be visible over the Renko charts i think. (VKSL just throws up the levels). If you can have an EMA plotted on Renko charts, i am sure you can have the VKSL also.

 

[timepass]

Maybe someone can show me how to plot VKSL on Kite. Thanks in advance.

A few days earlier i had mooted the idea of overlaying the vksl on these renko charts. Someone objected saying that renko is independent of time. My submission is where does time come up in VKSL. You can plot it off the 1min/5min/15min TF. The line should still be visible over the Renko charts i think. (VKSL just throws up the levels). If you can have an EMA plotted on Renko charts, i am sure you can have the VKSL also.

 

[Tuna]

This is what I meant

TF hourly. You can nail more trade in lower TF. But dont go by mere frequency, here we are lowering frequency to increase win rate (90% I guess) and RR. Few trades yielded 1.5k I guess.

Arugument could be made, why note to go long at the first green renco ->> you can, who is stopping you. But then see the number of whips you will get. Making money is about going for high probable trade.

If frequency sucks - go for lower TF, you will get more opporutinities.

Always remember - there are 3 things.

1. Win Rate - How many out of 100 traded you win, or simply win%
2. RR - what is loss you make when you lose compared to profit on winning trade
3. Frequency - How many time Babu Rao get a chace to drink, I mean trade

Do whatever, you have to sacrifice 1 of these to improve the other 2. This is the matrix of trading - considering your instrument is fixed (alway BNF, or NF).

What you can do - improve 1 & 2 and sacrifice 3, and scan for new instrument everyday for this setup. Cheers.

If someone says, he does all 3 in same instrument - he is making you something which starts to alphabet 'Ch'.

 

[timepass]

Oh Kite. how did you eliminate +DI and -DI ?? Color them black ?

This is what I meant

TF hourly. You can nail more trade in lower TF. But dont go by mere frequency, here we are lowering frequency to increase win rate (90% I guess) and RR. Few trades yielded 1.5k I guess.

Arugument could be made, why note to go long at the first green renco ->> you can, who is stopping you. But then see the number of whips you will get. Making money is about going for high probable trade.

If frequency sucks - go for lower TF, you will get more opporutinities.

Always remember - there are 3 things.

1. Win Rate - How many out of 100 traded you win, or simply win%
2. RR - what is loss you make when you lose compared to profit on winning trade
3. Frequency - How many time Babu Rao get a chace to drink, I mean trade

Do whatever, you have to sacrifice 1 of these to improve the other 2. This is the matrix of trading - considering your instrument is fixed (alway BNF, or NF).

What you can do - improve 1 & 2 and sacrifice 3, and scan for new instrument everyday for this setup. Cheers.

If someone says, he does all 3 in same instrument - he is making you something which starts to alphabet 'Ch'.