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Opinion on Renko Bars ?


fryguy1

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I'd suggest using range bars in place of renko bars. They are time independent and have real closes, not synthetic closes like these modified renko variants or the old school one that can have horrible slippage by the time you see the next bar print. A 5 tick range bar is quite good across a wide variety of futures contracts that I've traded (for examples, NQ, YM, RTY / TF, CL, GC, NG).

 

My cynical view of renko bars is that they were made popular again about 4 or so yrs ago by, imo, the scam-fest world of futures trading system vendors who wanted to make price charts look artificially smooth and "easier" to trade so you'd jump all over their $1000+ trading system offers ("hey, it must be good if they want so much money for it, but I *have* to use their renko bars for it to work well!")

 

Embrace volatility. Don't hide the nastiness of it with synthetic price bars. You learn more from that volatility front-and-center, see where the pullbacks are to take advantage of. It's also what helps you recover more quickly (in a winning system) when you get the account draw-downs.

 

I have no problem with minute-base, volume-based or tick-based charts either. A 1-minute chart with an eye on the 5 min and 30 min in intraday futures trading works for me alongside a 5 tick range chart. I always liked time not being required to make a new price bar.

Edited by lbf4223
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