Sunday, September 06, 2009


The series of charts below are all Renko SPX charts, starting with the longer time frame Monthly and narrowing down to the 5 minute chart at the end. I've embedded two trading systems on these charts, first the Blue Wave Trend Model and second, an ATR_TrailingStop trading system.


Monthly with Fibonacci Retracements from 2007 Highs



Two hour


5 minute

I don't want to say too much about these charts, leaving much of that observation and the "ah-ha" moments to my readers. But I must comment on the two trading systems, which as you can see, identified the dominant trend for every time frame with amazing consistency.

Finally, the second chart applies Fibonacci levels from the all time highs in 2007 to the March 2009 lows. These levels reveal the 2009 rally as about a 38.2% retracement of the 2007-2008 decline, so far.



Anonymous said...

I m new to using the Renko charts, I was of the understanding that time was not a factor. Just price action which is determined by the height you set each bar to represent in terms of price movement. If so, how do you configure your charts on the different time frames for Renko....tia

Anonymous said...

It is the height which is preset, the price movements are simply inputs which are parameterised (as in any chart) by a chosen time frame, eg. with Renko if price movement reverses within given time frame no box is drawn..


Anonymous said...

I hope Allan or someone else will supply a lay person's interpretation of the charts and what is indicated in the near future. TIA

Background said...


Here is a good info site on H1N1.

Happy Labor day.

Anonymous said...

Allan - please can you help give a new reader perspective and understanding of the charts?


Anonymous said...


Very interesting use of RENKO.

Although I can see your combining this Japanese wonder with your Blue Wave charting software and an ATR indicator, I'm puzzled as to how your overcoming the problem of disappearing bricks verses fixed bricks (especially in quicker time frames) ?

This appears to be a great combination if you could address this issue.

I've always considered Renko charting to give a unique trend following perspective but a hurdle seems to be the brick ghost effect.