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Published: August 29th 2017
Trading may be your profession, part time job or hobby in any case the main objective of trading is earning profit. While trading, you might experience certain problems like over trading, over analyzing, scare of losing money, trading inconsistently etc. One of the reasons of such problems may be, not having effective and clear chart to focus on.
For trading it is important to get clear pictures of the market before taking any decision. There are various types of chart based on time, volume and only price available for making your trading experience smooth and profitable.
Various types of chart for trading
Time based data charts provide each data point for certain time period. Signals you get in lower time frame charts are often more than the daily chart but the reliability of the data will be less in lower time frame chart. Examples of time based charts are line, bar, candlestick
Activity based provides the data based on number of the shares traded and transaction occurred and provide clear picture of market activity. Example volume and tick chart.
Price charts provide data only if there is price movement. Examples are range bar, point and figure chart, renko chart etc.
Significance of price based chart
Renko from the Japanese word Renga which meaning bricks is a very popular forex trading charting system originally developed in Japan. This pure price based bricks charting takes only price as consideration, not the timeline. It has been popularly adopted all over the world. Now it is available for configuration on MT4 (meta trader 4) platform as well.
This popular renko MT4
charting is very effective on tracking price fluctuation by some pips but may not be useful if one is looking to track each pip changes in a tight range. As Renko bricks are depicted only for some number of pip changes it will not show tight range shifts. Depending on your trading practice, Renko can be a good or bad choice over other charts available in the market. Below mentioned factors may decide if this is your tool of choice:
· If you are not concerned with each pip or small fluctuation Renko can help you as it filters them out.
· Price is the only dimension and time is not considered. So if you are trying to track minute by minute irrespective of price changes, this is not your tool.
· No built in capability of Renko charts in MT4 platform pushes you to configure before you can use it on MT4 platform.
· Set your rules and configure Renko accordingly to help you track Simple moving average
This whole profitable trading can be renko enabled by installing Renko EA and setting Entry and exit criteria filters based on EMA fluctuations you are comfortable with. Once configured,renko can guide your trading to easy operated profitable deals. All one needs to monitor is red and green bricks and when to buy with bricks turning red to green and when to sell with bricks turning green to red.It is possible that Renko chart might not change for a long time. Only significant price fall or rise will reflect on the chart as a bricks addition or deletion. When you are using renko chart for trading, always trade on the dominant trend.
Fairly easy, isn’t it!! Well guys set your strategy well so that this whole experience doesn’t jeopardize your trading experience.An auto programmed trading policy from offline Renko chart can be money making machine with minimal intervention but it’s not readily available yet.
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