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ETH Renko (Daily 14pd ATR block size), Potential Reversal @$3k My recent idea of a rising wedge bearish continuation pattern may be invalidated at this point because of ETH's pop up the 3k (unless i'm willing to accept the blemish of a large fakeout breakout). However, it still remains that things are looking overheated on multiple time-frames (w.r.t regular candles). Moreover, volume has been decreasing throughout this entire extended uptrend. So I took a step back and tried to see if renko bars could off a clearer view of that's going on with ETH. Looking at fib lines, there appears to be confluence around the $3000 level where ETH is currently meeting short term resistance. To a naive eye like mine, stoch rsi (14) and regular rsi (14 & 7) appear to be in a slowing/coiling uptrend. Perhaps a trend reversal is due assuming assuming the $3000 level holds as a stiff resistance and we get a legit bearish cross on the stoch. In the event of reversal, i'll be looking at $2500 and $2100 as the first levels levels to add. However i'm aware that we could go quite a bit lower if we actually reverse trend. Full disclosure, I sold around $2650 so yes i'm a little salty that we popped up to 3k haha.
INDEX:ETHUSD
by rlando
Renko Charting - How it works & how to trade them for big profitDear traders In this in-depth post, I will show you everything you need to know about Renko charting, how they work, how to set them up, and how to realize significant profits with this fantastic chart technic. Renko charts are based on so-called bricks, which are build by price movement. Those bricks are built on two inputs, brick size and refresh time. And there, the most misconceptions are already starting. RENKO REFRESH / CONFIRMATION TIME The refresh time !!!! I have seen so many guides about Renko charting and how cool they are, but 99% of them don't talk about the refresh time! Renko charts look good on a, let's say, 50 brize size and a 1hour refresh time. BUT THEY DON'T WORK LIKE THIS! Here is an example of two Bitcoin Renko charts with the same brick size of 50. One of them works, and on-off them doesn't work at all for trading. Can you spot the difference? Both charts show the chart based from the 26th until the current live price. But they look different... Bitcoin Renko Chart example 1 Bitcoin Renko Chart example 2 The difference is within the refresh time. So, for example, on the Bitcoin Renko Chart example 1, we are using a 1 Hour refresh time, and on Example 2, we are using a 15 second refresh time. But what does that mean? On classic Candlestick charts, we choose the time frame of each candle. For example, let's say 1 Hour candles or 5minute candles. This means each candle represents the price changes within this time frame. Once we are looking at a Renko chart, we are not looking at the time. We are looking at price movements. That's why we define the size of a Renko brick. We don't care about how long it needs to build a 50 Points Renko brick. We care about the bricks are being constructed. So if we have a Renko chart like the example, 1 with a 1 Hour "refresh," or let's call it confirmation timeframe, the bricks will be confirmed once an hour has passed by. Here is an example with Numbers. 1 hour refresh time 1 hour refresh time Today at 2 pm, we have a Bitcoin price, for example, of 40.000, and we have a green brick confirmed at this point. Now at 2.15 pm, the Price dips down to 35.000, and at 2.59 pm, it jumps back to 41.000 and holds there until 3.00 pm. This means two new green bricks have been build and confirmed (2x 50 Points from 40.000 --> 41.000). But why is the price drop to 35.000 not being shown or displayed? It's simple... because the Price moved within this 1 Hour refresh time. Bricks are being confirmed after the refresh time. So the Price can do whatever he wants within this time. In the end, it only counts the Price at 3 pm since it's set on a 1 hour refresh time. And that's the reason why there is only 1 Time Frame / Refresh time for Renko charts! 1min or even, if possible lower! Because we don't care about TIME! We care about the price change. And with, let's say, a 15 second refresh time, the chart checks every 15 seconds whats the current Price is and confirms a new brick-based on that. Here you can see the same price movement with two different refresh times. As you can see, those two charts look significantly different even if it's the same price movement. And then you have people using Renko with a 1 hour refresh time and wonder why they have lost their trade even if two new green bricks are built... Again on Renko charting, we are looking at price changes, not time! That's why we want the refresh rate as short as possible (1min or below). You might ask, "But then i have a red and green brick every 15 seconds and maybe have 100 trades within a few mins???" NO! This is where the brick size comes into place. Selecting the right brick size is one of the essential things to trade Renko successfully. RENKO BRICK SIZES Renko brick sizes are essential to trade successfully. Keep in mind that every single Symbol, whether Bitcoin , EUR/USD , or a Tesla Stock , needs its individual brick size, matched to your trading style and the Symbol price movements. Brick sizes determine how your chart looks. The same chart with the same refresh time (which we talked about above) could look diffrent. Here are two examples at the Tesla Stock . Left side (50 Points brick size) Right side (5 Points brick size) As you can see, we have the same Symbol but with different brick sizes. on the left side, we see the Tesla Stock with a 50 Point brick size which shows only 32 Renko bricks since January 2020. On the other hand, we see the chart on the right chart the Tesla Stock with a 5 Point brick size which shows thousands of Renko bricks. With that said, brick sizes determine how many bricks we see. This is important to fit it to your trading style. A long-term Investor might use the left chart with the 50 Points bricks when a daytrader uses the 5 Points chart. You might ask yourself now, why? It's kinda "simple". Let's say I am a long-term investor, and I am looking for a Stock that I can buy for the next 2-10 years, and i need a "good" price to enter for the long-term Investment. On the Chart below, you can see the Tesla Stock with a 10 Points brick size. As you can see, there are not as many Bricks as we would have on a 1 Point brick size, for example, but this chart could help a long-term investor find a good entry for a long position. For instance, he might look at the chart and Buys Tesla Shares after a period of Red bricks once a new green brick appears and sells them once a new red brick have been formed. As you can see in that red brick period, we have a green brick that would trigger a long signal, but that's normal —That's why you have to work with a matching Stop-Loss Management. Most common and good Stop- Loss Managements include 2-3x your brick size. That means if you are trading on a 10 Points brick chart. Your Stop-Loss could be 20 or 30 Points below your entry. On our Tesla example above, that would mean a long-term investor on this chart would have a 5.5% Stop-Loss Limit, since each brick of 10 Points equals around 2.8% But now we still have the question how do I determine my brick size? There are different ways to determine your brick size, and there are two brick size options as well. You can either use traditional brick sizes or ATR brick sizes. TRADITIONAL VS ATR BRICKS Traditional bricks are simple. You go to your chart and enter manually the brick size you want to use for the specific Symbol. Try different brick sizes, look at the chart and figure out for yourself how many bricks are produced a minute, a day, or a month, and match it to your trading style. As more you want to trade, the smaller your brick size should be. That's why day traders use smaller bricks (lower point sizes), and long-term traders use bigger bricks (higher point sizes). Just match it to your preferred trading style. If you generally have no idea whats a primary brick size for a Symbol could be, check ATR bricks; they will give you an Idea. ATR bricks are built on an average brick size in the past. For example, a standard ATR is 14. This means the bricks are calculated based on the average price changes in the past 14 days. Day traders often use ATR bricks. I personally don't like them since I prefer to check the prices in the past, let's say week myself, and set up my brick size manually based on that. Also, keep in mind that you cant use Strategies with Alerts on ATR-based charts. That's also a reason why I prefer to use traditional Renko charts. But generally, ATRs are good if you are looking at a new Symbol and want a general idea about a standard brick size. Now we have talked quite a lot about what Renkos are, how you should set them up, why the brick size matters and your time frame (refresh/confirmation) should ALWAYS be 1min or lower. Additional note: To use Renko charts on 1min or lower timeframes, you need to upgrade your Tradingview version. Let's now look at how we can trade Renko charts! How to trade with Renko charts Generally, in my opinion, you can trade Renkos in three ways. Trade the trend Trade on Chart levels Automated Trading quick Buy/Sell on bricks Trade the trend If we are trading the trend with Renko charts, we are looking at trends and minor corrections to enter a new trade in the trend direction. You might already have heard " The trend is your friend" which I think is precisely why this trading style is more likely to work than others. By trading the trend with Renkos we are looking at new bricks in the trend direction to enter a position. That means on a positive trend we are waiting for a new green brick after red bricks, and on a negative trend, we are waiting for a new red brick after green bricks. Sounds complicated? It isnt. Here are some examples. Trading the trend with renko bricks Like in every strategy, not every Signal is a winner that's why I have to remember you to make sure you have an according Stop-Loss and general Trading size Management to get significantly profitable with your trades overall and long term. For example, if you are looking at a 10 point brick size and each brick equals a 1% movement, you trade with an x100 leverage on a CFD. One negative brick might already give you a margin call.. Please keep that in mind and calculate your brick size, trading size and stop-loss according to that. Here is another example of Tesla - trading the trend with Renkos on a Chart that I am using for Daytrading. Trade on Chart levels Trading on Chart levels is also an excellent technic to use Renko charts to gain profits. This technic is a bit more complex and uses traditional chart techniques combined with Renkos for entries. Here is an example of my DAX Daytrading chart I use to trade chart levels with Renko. I use the old-school technical chart analysis to determine Chart Gaps, Support, and Resistance levels. I use a higher time frame Candlestick chart to do my technical research ( Supports, Gaps etc..), a smaller candlestick chart to get a better view at certain levels, and finally, the Renko Charting to determine my entry. This means I use the Renko on these levels to confirm the trend change based on the new build Renkos and get my entries based on them. This technique needs a little more in-depth understanding of overall and general technical chart analysis and combines traditional charting with Renko charting. Now let's talk about the last trading technique Automated Trading quick Buy/Sell on bricks Let me jump in here first! This technique really depends on your brick size and your broker's spreads etc.. Having too high spreads from "bad" brokers will end up in Losses with this strategy! I only use this technique for crypto trading with some leverage.$ That being said, the strategy is quite simple. You buy on a green brick and sell on red bricks. I mainly use it for a higher volume of trades and, as mentioned above, for trading cryptos (the main ones BTC/ETH and others like Doge, Cardano etc..) but not for any new coins... I generally don't recommend trading new strange currencies, but that's another Topic. So basically, what you do is run a buy/sell indicator on your chart that has alerts on it and then connect your Tradingview Alerts with your crypto exchange to get them executed. Here is an example of my Chart, including my Renko reversal script, which has alerts that are being forwarded through the API to my Bitmex Account, where the trades get executed. I usually trade them with x5-10 leverage. If you want to know more about the indicator script, just message me. Now that we have mentioned Renko indicators, let's cover the Topic of rePaint and non rePaint indicators. rePaint vs non rePaint indicators Be aware! Renko chart indicators and their results can easily be tweaked to look good in backtesting!! You might remember what I have shown you early in the beginning of this Post. Time Frames and how the chart looked different on 1h and 15 seconds. If i would publish a renko indicator on a chart with a 1hour timeframe the backtesting would give me incredible results with 98% winning trades... At this point, you should probably know why... Remember the screenshot above? This one: So on the one-hour chart we don't see the dip that would have margin called your position in most times, but on the backtesting, it would generate a + of 100 Points. So please be aware of Indicators that show backtesting on timeframes over 1 Minute when it comes down to Renko indicators. Remember Renko Charts ALWAYS have to run on 1min or lower refresh times!! Everything else is BS. Then we also see so-called rePaint indicators and non rePaint indicators. What does that mean? You might have seen a dozen indicators for classic candlesticks and other charting and Renkos that produce great backtesting results. Then u apply them to your chart, but on some mysterious way, they don't work... Tradingview is already doing a great Job in mention it now on the Backtesting with an Attention notification that this indicator might repaint. But unfortunately, not everything is covered yet. So let me explain it to you so u can understand why that happens and how to prevent that. To have an indicator produce a Signal, you have to give him input. There are tons of Inputs for pine scripts (the code language for Tradingview script), but the important one is the open and close input. If we have an Indicator that produces a Signal on "Open", we have so-called rePaint Signals because the Signal is triggered as soon as the price opens. Look at this chart: As you can see, currently, the Price is trying to form a new red brick but it's not done yet since we know a brick is formed once the Price is achieved. On an indicator with an "Open" signal, we would have a fake alert that tells us to Sell since the Price is currently red.. But as we know, this brick can turn around, Price goes up, and we have a green brick. That's a so-called repaint. As soon as the Price turns into the green, the old sell signal would disappear "rePaint" The same is on Candle Stick charts. If i have an Indicator that tells me on green candles, I go long and on red Candles, I go short and my 15minute Candle opens in the first 5mins green I would get a buy Signal even if the Candle then turns into red and the Signal disappears. And on the Backtesting, we have the problem that this is not calculated. It only considers the finished price so the Signals look accurate... That's why good indicators always produce a Signal on "CLOSE" which means the Candle, brick or whatever you use on your Chart is closed! Nothing can affect that Candle or brick anymore since it's closed! You want an example?`Look what happened to the screenshot i just took 3 mins ago.. The red brick, which on an open would have triggered a short signal. disappeared and price went up. That's why my Indicator haven't given any signal there because it only triggers on a CLOSE The same chart Image just a few mins later.. So let me repeat this is important If you are using Indicators for Tradingview, always make sure the Signal is triggered on a CLOSE! Everything else will rePaint! For Renko Charts same rules apply, and additionally, make sure if you see Backtesting data its on a 1min or below time frame. Everything else is BS as well, and YOU know you know why. I hope this Post helped you to understand Renko charting, how they work and how u can use them to your advantage for your trading. I hope I also could explain to you the topic of Indicators, why or how they rePaint, and that Backtesting data doesn't always show you the truth! So watch out for the things I have written here before you get any new Indicator. If you have any questions about my trading style, Renkos, or indicators, just leave me a message or DM me. Kind regards qrDanielqr
BITSTAMP:BTCUSDEducation
by qrDanielqr
37
< $20K BTC still possible. We're not out of the woods yet.I got rid of the noise by using Renko bars and saw a potential Bear Expanding Triangle in development. An Expanding Triangle is a pattern that starts with the price action squeezed tightly in the Apex (dotted blue line). There will be usually at least two swing highs and two swing lows in price. Overall volume usually diminishes as the pattern develops because traders become more and more unsure as to the market’s future direction. Also there may be several intermediate failed efforts to reach either the support or resistance as outlined by the triangle extensions. If the action creates a new bearish breakdown, typically the action will repeat the volatility experienced with the Pole creation (the vertical thick blue line). We also need to pay close attention to the volume after the breakdown to recognise further development for the pattern. Another breakdown downwards is possible. What do you think of this pattern?
Long
by unexpect-the-expected
2