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As I promised I finally got time to put together a post on using Renko with the SMI.
The setting I am currently using for SMI is a 3 point block. As you will see using a 2 block reversal this allows you to capture most of the long trends without being whipsawed out by flags/small consolidations.
Because I'm also prepared to sit trades out rather than having an always in system I'm using MACD just to help keep me out when the action is likely to be sideways.
I find the Renko charts allow me to see patterns and S&R levels clearly, the patterns like the descending triangle below stand out much better on Renko than they do on a standard candlestick chart.
This final chart shows both an example of trend and a double bottom. All these charts come from the last couple of days on SMI.
Renko is simple, it's based only on price movement and trading with it feels very relaxed. If you were to run an always in system just based on Renko with the settings I have given above, the points gain (excuding slippage) last week would have been something like a total gain of 395 points in 50 trades. Average win 22.3 points, average loss 3.54 points. 27 loser/flat trades and 23 winners. I think by staying out when it is in obvious consoldiation that profitability could be increased but it's pretty good as it stands for a "no thought"system.
The setting I am currently using for SMI is a 3 point block. As you will see using a 2 block reversal this allows you to capture most of the long trends without being whipsawed out by flags/small consolidations.
Because I'm also prepared to sit trades out rather than having an always in system I'm using MACD just to help keep me out when the action is likely to be sideways.
I find the Renko charts allow me to see patterns and S&R levels clearly, the patterns like the descending triangle below stand out much better on Renko than they do on a standard candlestick chart.
This final chart shows both an example of trend and a double bottom. All these charts come from the last couple of days on SMI.
Renko is simple, it's based only on price movement and trading with it feels very relaxed. If you were to run an always in system just based on Renko with the settings I have given above, the points gain (excuding slippage) last week would have been something like a total gain of 395 points in 50 trades. Average win 22.3 points, average loss 3.54 points. 27 loser/flat trades and 23 winners. I think by staying out when it is in obvious consoldiation that profitability could be increased but it's pretty good as it stands for a "no thought"system.
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