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Trading Strategies
Easy to Use Renko Trading Strategy – Video
Last Updated on January 26, 2023 by Mark Ursell
This video article shows a Renko Trading Strategy that you can use to trade the S&P 500 or SPY ETF.
Table of Contents
Renko Trading Strategy – Video
“If you can keep your head when all about you
If – Rudyard Kipling
Are losing theirs…”
Watch the video to see me demonstrating the strategy. You can see the strategy rules at the bottom of this article: Strategy Rules.
Renko Charts Trading
When the markets are frantically trying to make you sell. The charts look terrible and the headlines are screaming recession – this is when you need Renko.
Renko charts simplify our trading screens. They show us the existing trend and tell us when we have got a possible change of direction. You can learn more about Renko Charts and why I like them in this article: How to Calculate Renko.
The uncluttered Renko charts actually help us stay calm as traders. The greatest traders like Paul Tudor Jones, Warren Buffet and George Soros are masters at separating their emotions from their trading decisions.
Black Wednesday
In the months leading up to 16th September 1992, George Soros had been building a short position in the British Pound. He was convinced that the economic fundamentals would force a massive devaluation.
However, the pound was increasing in value, and Soros was under pressure. His Quantum fund was leveraged to the hilt and if his gamble failed, he faced the nightmare of embarrassment and potential ruin.
Arrayed against Soros was the might of the British political establishment and the vast resources of the Bank of England. The politicians had decided that the pound must stay within the ERM currency band. This meant keeping value with the powerful German Mark.
In early September the cracks in the pound started appearing and it fell back below $2. Soros could see his losing trade moving towards breakeven and he must have been tempted to reduce his leverage and make sure he didn’t lose everything. But despite the headlines and the criticism Soros kept his position and made a billion dollars.
“Soros has taught me that when you have tremendous conviction on a trade, you have to go for the jugular. It takes courage to be a pig. It takes courage to ride a profit with huge leverage.”
Stanley Druckenmiller – New Market Wizards
Check out New Market Wizards on Amazon: The New Market Wizards: Conversations with America’s Top Traders
Get More Winning Trades
Most of us would trade better if we could remove emotion from our trading decisions. When we stay calm we make better decisions and execute those decisions better.
One way that you can stay calmer and make better trading decisions is to follow a trading strategy that has a long-term positive expectancy.
With Tradinformed Backtest Models you can simplify your trading and focus on the strategies that actually work.
Renko Trading Strategy Rules
The trading strategy rules that I used for the video were as follows:
Long Trades (enter when all conditions are met)
- Renko bar size 2 * ATR.
- Renko chart bars must be long
- Enter at the close when the retracement entry is 1 (close is lower than previous close).
- 4 Period RSI lower than 70.
- Profit target 6%.
- Stop-loss 2%.
- Trailing stop, 1%.
Short Trades (enter when all conditions are met)
- Renko bar size 2 * ATR.
- Renko chart bars must be short
- Enter at the close when the retracement entry is 1 (close is higher than previous close).
- 4 Period RSI greater than 30.
- Profit target 6%.
- Stop-loss 2%.
- Trailing stop, 1%.
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Hi Mark,
What are the rules to enter a long or short trade with the renko bars?
Thanks for all your effort and to share with us.
Hi Alexander, thanks for the comment, I’ve added the rules to the bottom of the article.