Renko Gold Trading Experiment

newtrader101

Well-Known Member
#1
Friends,

I have not been strictly following the rules of logging each trade and reviewing it, and the results have been equally haphazard. I am posting them publicly as this will motivate me. Also, your suggestions would help me improve.

Came across this strategy on Renko: http://renkotraders.com/renko-trading-strategy/renko-trend-and-timing-strategy/
Renko seems to reduce our confusion when the market whipsaws, and generally the stops are hit fewer times. It also shows the key levels more clearly.

Inidcators and other details:
  • Stochastics oscillator: 5, 3, 3 setting with 80 and 20 determining the overbought and oversold levels.
  • Slightly modified the MA in the original strategy (in the link) to the middle Bollinger band (default settings).
  • Renko Bricks: ATR based auto select
  • Daily TF.
  • Instrument: GoldPetal
  • Initial Capital: 1000
Strategy:
LONG: When Stochastics is bullish and price bounces upward off LBB or MBB. Exit when brick changes to red

SHORT: When Stochastics is bearsh and price bounces downward off UBB or MBB. Exit when brick changes to green.

The chart looks like this:

1525292372946.png


Gold has broken out of the UBB when it was horizontal (ranging). So will be going LONG tomorrow. Otherwise I'd have shorted as soon as a red candle formed after the Stochastics turns bearish.
This move may not last long as it is near the high formed in July.
 

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newtrader101

Well-Known Member
#2
However, the candle charts look like this:

1525319864394.png


So I probably should wait.
Will enter if it is bullish on strong volume on daily.
 

newtrader101

Well-Known Member
#3
The charts of MCX Gold Petal daily on Investing.com and Zerodha differ.
I will have to go by Zerodha.

1525322183959.png


1525322226871.png
 

primitivetrader

Well-Known Member
#4
renko is independent of time and you are trying to use it on time based charts. be very cautious
 

newtrader101

Well-Known Member
#5
renko is independent of time and you are trying to use it on time based charts. be very cautious
Thanks primitivetrader.
Can I take it these charts are not sufficient. Manually back testing, I found satisfactory results on the charts.
I guess your signature says it all.
 

primitivetrader

Well-Known Member
#6
my simple suggestion is just stick to candlesticks. if you can learn it and grasp its principles its enough to trade profitably. look for candlestick reignited course by steve nison. its the best stuff on candles.
 

newtrader101

Well-Known Member
#7
my simple suggestion is just stick to candlesticks. if you can learn it and grasp its principles its enough to trade profitably. look for candlestick reignited course by steve nison. its the best stuff on candles.
Thanks again. I understand (somewhat) what you mean. Yesterday went long on Adaniports intraday based on Renko. However, it was starting to look bearish, so checked the candle chart. There was a bearish rejection bar on 5 min.
I immediately reversed the position and regained some of the loss and even made a little profit.

However, Renko has caught my fancy. I need to complete this. In the light of your cautionary note, I decided to trade minimum quantity. :)
 

newtrader101

Well-Known Member
#8
Reversals on Renko require atleast two consecutive bars.
Stop loss one bar.
As the daily chart doesn't have enough bars, I'm following hourly chart (I still haven't got my head around how not to use TF in Renko. Which means I have to decide the brick size for each TF. However, the chart autoselects it based on 14 ATR for the TF. So leaving it at that and trading only one quantiry (margin 150/-).
 

newtrader101

Well-Known Member
#9
1525327452209.png

Am shorting because stochastics is bearish and Renko bar is below MBB.

Short Entry @3099
 
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