Renko Charts

Renko charts are a price-only chart type that draws a new brick each time price moves a fixed amount — the box size — in one direction, ignoring time and smaller fluctuations entirely. A rising brick prints when price climbs one box size above the previous brick's top; a reversal requires a move of typically two box sizes the other way. The name comes from renga, the Japanese word for brick. Because bricks form only on sufficient movement, quiet periods add nothing to the chart, which strips out much of the noise that clutters candlestick charts. Traders use renko to make trends, support and resistance easier to see, choosing the box size manually or deriving it from a volatility measure such as average true range. The trade-off is that exact timing, gaps and wicks are lost.