Discussion on Renko and PnF charts

[Seshadri]

Addendum

For all those wondering why this storm in the tea cup let me explain. The Renko and P & F charts are great to filter out the noise in intraday price action. Further the indicators tend to come out much more smoothed than a bar/candle chart. Unless one has seen it in action (accurately that is) it may sound foreign and useless. So before sounding out please take a look at what you might be missing and then come up with a reasoned case.

Sesh

[ACM]

from Technical Analysis A-Z by Steve Achelis

Calculation

Renko charts are always based on closing prices. You specify a "box size" which determines the minimum price change to display.

To draw Renko bricks, today's close is compared with the high and low of the previous brick (white or black):

If the closing price rises above the top of the previous brick by at least the box size, one or more white bricks are drawn in new columns. The height of the bricks is always equal to the box size.

If the closing price falls below the bottom of the previous brick by at least the box size, one or more black bricks are drawn in new columns. Again, the height of the bricks is always equal to the box size.

If prices move more than the box size, but not enough to create two bricks, only one brick is drawn. For example, in a two-unit Renko chart, if the prices move from 100 to 103, only one white brick is drawn from 100 to 102. The rest of the move, from 102 to 103, is not shown on the Renko chart.

Just because you are looking at this intraday does not change the logic. If using daily you would wait for the close of the day before drawing boxes. Equally if you define 10 minute as the interval no boxes should be drawn UNTIL the close of the 10 minute interval.
The argument that they are time independant is incorrect because a daily chart IS itself based on an interval.
Now, to make things easier one "could" draw the projections (which is what my efs does) of where the boxes "could" be IF the interval closed in that specific moment but those are mere projections and they could disappear the very next second. Otherwise Renko charts would suffer the very same noise that regular (candle or bar) charts have and that they instead are supposed to filter out.
The fact that eSignal has elected not to draw the projections does not mean
a) the tool is broken or
b) it is lagging
which have been the object of my argument since my first reply.
The charts that draw boxes independant of time are NOT Renko but are called Equal Range Bars (btw recently referenced by someone else in the Bulletin Board)
Alex

[Seshadri]

Lag

Alex,

You are right that the Renko chart is based on closing prices. Even Bar charts can be on close prices but if you look at it the bar is flashing along with all the other indicators as well even before the time interval chosen is completed. Can eSignal folks do the same for Renko charts and P & F charts too? Right now there is a lag even after completion of the time interval for the Renko chart to show a new box (after price has moved beyond the box size chosen).

Sesh

[ACM]

Sesh

You are right that the Renko chart is based on closing prices.

If I am right that a Renko chart is based only on closing prices then eSignal is equally correct in their implementation of the chart. That is a fact.
Now, if you are requesting a modification that departs from a text book implementation of a Renko chart then that is a different matter on which I will not disagree.
However, that is a far cry from the severe - albeit incorrect - accusations you leveled against eSignal in your opening and subsequent messages in this thread. Those I have and will question.

Alex

[Seshadri]

Selective

Alex,

I hope you read my previous post in full and not just the first sentence. I have not concoted any accusations against eSignal. The Renko charts do have a time lag even after completion of the time interval and P & F charts have well documented prrof that they are completely wrong as shown by one of the users in the BB.

Sesh

[Doji3333]

I agree with Alex...

Alex,

I agree with your statement. As I posted in my last message here...

"I believe this is correct because the Renko charts are based on the closing price of a bar - and while the bar is still forming, the closing price is unknown."

I've known Steve Nison for many years and have studied candlestick charts for an equal number of years. The Renko charts within esignal appear to be acting correctly and properly.

I don't know much about the PnF charts - so I'll keep out of that one.

Sesh's early statements in this thread were harsh and proven wrong. If Metastock and TradeStation are doing something different, then there might be some benefit to the way they are doing it. But based on my knowledge (and others), the are fine the way they are.

[ScottJ]

FYI

I changed the title of this thread so it would be easier for users in the future to spot this discussion and review it. Good dialogue here.

Thanks.

[Seshadri]

RESPONSE FROM MATT REQUESTED

Hello Matt,

I hope you were able to look up the threads that I had mentioned about Renko and P & F charts. The one thing I had omitted to tell you was what the Metastock software does with the eSignal datafeed. It projects the next box(es) depending upon price action as well as the indicators until the completion of the time interval chosen and then draws the box(es) without any delay after the interval is complete. This is exactly what happens in a candle or bar chart as well in eSignal. So I am sure you folks can produce the same thing also for Renko charts. As regards the P & F, looks like there is a lot of rework required.

Could you please post a reply and update us with your thoughts. Thanks. I surely did not mean to be harsh and if I came across that way I sincerely apologize.

Sesh

[Doji3333]

Seshi....

Seshi,

I just wanted to write to express my appreciation for your last post.

"A measure of a man is (in part) dictated by his ability to admit his fault, when necessary".

You are a good man and I simply wanted to express my thoughts.

Additionally, as I stated earlier, this is a very good subject to discuss. I, personally, will attempt to develop some code to assist other users of Renko charts with EFS. As well, I'm sure the development team at esignal will reply with their thoughts in the future.

Just like Alex is doing, we could develop an EFS that "projects" the bars and number of bars prior to being drawn. It is a rather simple function. I will try to do something like this today or tomorrow (really busy today).

Best regards,

[Seshadri]

Thanks

Doji,

Thanks for your sentiments. I hope I did not offend Alex, Matt or anyone else with my comments. It just got my goat when I realized that what Metastock can do with eSignal's datafeed that eSignal was not able to deliver. I became a eSignal subscriber at the beginning of this year and I had voiced my concerns about the lag in Renko charts in Feb-Mar to their technical reps and was told that they would be fixing it in the later versions. I started with 7.1 and now we have 7.4 and nothing has changed. I tried using P & F chart instead and found to my horror that they were not working as they should be. I checked this BB and found this well documented source listing the problem. So I had to pour my grief somewhere and found an outlet here. I hope people will not misinterpret what I have said. If something I have said is wrong and someone can tell me why I will immediately accept my error. I am just trying to make a trade and I need good tools that I am comfortable with. That is all.

Sesh

[ACM]

Sesh

I hope I did not offend Alex

Not in the slightest. Do consider that I did the Renko box script in the first place without anyone asking me for it which should have given you an idea about my opinion on the subject.
Having said that I will always question what I believe are incorrect statements.

Alex

[eSignal_Todd]

I want to thank everyone in this thread for the feedback and help that has gone from user to user. We do understand that there are things lacking in the Point & Figure and Renko charts and are planning to address them this year. We've been through a lot of development on the software, network, and data sources this year and haven't been able to take care of everything we wished to get done.

There are many more things on the horizon and I'll make sure this doesn't get lost in the shuffle. I'm starting 2 new threads in the 7 Series Beta beta forum here that will be dedicated to comments and suggestions for Renko and PnF charts. What I'm hoping for is that users can comment on the things they find incorrect about each of these charts in their current form as well as suggestions on what they'd like to see in them. I'd like to keep them going with a positive tone so that we can work together to create the charts you're looking for. This worked very well as we recently developed the new Market Profile chart with the helpful comments from our users.

Please find these threads and make any comments that you feel would help us with these chart types.

Thank you,

[Seshadri]

Thanks

Todd,

Thanks for the update. I hope we will see the changes before the end of this year.

Sesh

[whizz]

I Posted a note about the Renko Refresh Bug here:

http://forum.esignal.com/showthread.php?s=&postid=14749#post14749

[fabrizio]

Just a reminder of how to use words. Words are stones: cannot throw them and then hide the arm. It is a matter of intellectual Honesty.
You can shout but not offend, right Linus?, and the ball roll aniway.

Here is the Pro's attitude : Ralph Nader? Rev. Brown? "I had a dream....."

For a company that is trumpeting "new" versions of its software every few months, I am amazed that the eSignal folks are continuing[colour=red] to flout their software's ability to do Point & Figure and Renko charts (I am sure that it is true for Kagi and Point Break charts also) when they don't work properly and have not worked properly from day one. They have not had the guts to acknowledge the problems and pull these charts from their software or fix them ASAP inspite of so many customer complaints.[/color] Is it not surprising that with the same eSignal data feed that Metastock software does these charts well!!

This is the time of piece of############# and populist side...
People like Alex are having to spend a lot of their time and effort to conjure up workarounds for this piece of ***. Shame on you eSignal.

Sesh

Bad , Bad , really Bad boys in Esignal.......!!!

I do understand that everyone has their priorities. But what is inexcusable is for a company to actively promote something when they know fully well that it is not working. Even for their 7.4 version they are highlighting that they have P & F Tick charts when they know it is fundamentally flawed. So regardless of one's priorities one should not actively engage in unethical practices.

Sesh

Bad and Incompetent tooooooooo......And we are upset! Statement.

The reason I am upset is because if another software co (like Metastock for example) can work it out and produce Renko and P & F charts correctly using eSignal's own data feed what does it tell you about eSignal's engineers? On top of that one has to plunk down $1500 for the other software too.

Sort of compassion? No he gots 3 MBA plus 1 PHD .....
Thinking constructively, I can suggest the following to eSignal:
1. Hire someone from Metastock who knows how to make these charts work; or
2. Get their engineers a copy of Steve Nison's book "Beyond Candlesticks" and Tom Dorsey's on "P & F Charting" and make them understand how it is supposed to work and fix it ASAP; or
3. Come out and acknowledge that these charts don't work and take them off their offering.

Sesh

AAAAARGH!!!

I tried using P & F chart instead and found to my horror that they were not working as they should be.

You guys here in this BB you do not understand.....I mean really.... (please note the appropriate PHD's "sounding out")

Unless one has seen it in action (accurately that is) it may sound foreign and useless. So before sounding out please take a look at what you might be missing and then come up with a reasoned case.

AND AFTER ALL this above , THIS :

"....I hope you read my previous post in full and not just the first sentence. I have not concoted any accusations against eSignal......".

What a gut, boy.

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