Renko Chart Question

[ghadley2]

This has probably been asked a million times, but:

I'm interested in using the Renko chart on various equities to establish longer term trends (ie, daily charts). My question is this:

When a new Renko box begins to form, it will be either 'green or red' depending upon the trend. Is it possible, as the box continues to form, for it to change color? Or is it the case that once the box begins to form, it is 'locked' into a given 'directional color' for the duration of that box?

I ask because it's quite common for, eg, candlestick charts to flash 'red/green/red' up to the moment the candlestick is complete, and only to lock either red or green at the close; just wondering if Renko boxes show the same behavior.

Thanks for any comments!

[ACM]

Re: Renko Chart Question

ghadley2
A Renko box (or brick) is formed when price has moved by the amount defined in the Box Size and does not change color. For more information on Renko charts you may want to see this article in the eSignal Knowledgebase
Alex

Originally posted by ghadley2
This has probably been asked a million times, but:

I'm interested in using the Renko chart on various equities to establish longer term trends (ie, daily charts). My question is this:

When a new Renko box begins to form, it will be either 'green or red' depending upon the trend. Is it possible, as the box continues to form, for it to change color? Or is it the case that once the box begins to form, it is 'locked' into a given 'directional color' for the duration of that box?

I ask because it's quite common for, eg, candlestick charts to flash 'red/green/red' up to the moment the candlestick is complete, and only to lock either red or green at the close; just wondering if Renko boxes show the same behavior.

Thanks for any comments!

[ghadley2]

Alex,

Thanks very much for that. I've been observing the Renko chart in real-time today and yesterday. Interestingly, on occasion nothing will happen for an extended period, then several boxes will form at once, usually indicating a trend opposite to the most recent prior box.

Is this a typical behavior? Eg, today at the open there was a 'green box' for the first few minutes, though price dropped quite a bit--then three red boxes appeared immediately, all with the same timestamp (about 8:50 CST).

Just curious....

[ACM]

ghadley2
The bricks are plotted only if at the completion of the chart's interval the price is above or below the High or Low of the previous brick by at least the value defined in the Box Size. If price is above or below by more than one Box Size then multiple bricks (each of one Box Size) will be plotted at the same time as required.
Alex

Originally posted by ghadley2
Alex,

Thanks very much for that. I've been observing the Renko chart in real-time today and yesterday. Interestingly, on occasion nothing will happen for an extended period, then several boxes will form at once, usually indicating a trend opposite to the most recent prior box.

Is this a typical behavior? Eg, today at the open there was a 'green box' for the first few minutes, though price dropped quite a bit--then three red boxes appeared immediately, all with the same timestamp (about 8:50 CST).

Just curious....