Forex Renko Charts FX Trading System

Forex Renko Charts FX Trading System

Disclaimer FOREX trading, online foreign exchange trading, foreign currency trading and Forex options trading involves risk of loss and is not appropriate for all investors. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results. Before investing or trading one should be aware that with potential profits there is also potential for losses that may be very large. Those acting on this information are responsible for their own actions. Information contained in this site has been obtained from sources believed to be reliable, but it is not necessary all inclusive and is not guaranteed profits. Forex trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the Forex market. Do not trade with money you can't afford to lose. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this presentation. The past performance of any trading system or methodology is not necessarily indicative of future results. Trading foreign currencies is a challenging and potentially profitable opportunity for educated and experienced investors. However, before deciding to participate in the Forex market, you should carefully consider your investment objectives, level of experience and risk appetite. There is considerable exposure to risk in any foreign exchange transaction. Any transaction involving currencies involves risks including, but not limited to, the potential for changing political and/or economic conditions that may substantially affect the price or liquidity of a currency. Moreover, the leveraged nature of Forex trading means that any market movement will have an equally proportional effect on your deposited funds. This may work against you as well as for you. The possibility exists that you could sustain a total loss of initial margin funds and your position will be liquidated and you will be responsible for any resulting losses. Investors are recommended to lower exposure to risk by employing risk-reducing strategies such as 'stop-loss' or 'limit' orders. We will not be held responsible for the reliability or accuracy of the information available on this ad/presentation. We assume that you are legally permitted to use our products. Making sure that you are following the global and your local laws and legislations is your responsibility. We cannot be held responsible for any damages or lawsuits against you do to such regulations. CFTC RULE 4:41 HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS. 2

Table of Contents 1. Introduction page, 4 2. FX Accucharts page, 5 3. Price Charts page, 6-7 4. Renko Bar Basics page, 8-9 5. Buy / Sell Setups page, 10-13 6. Trader Types - Setups page, 14-16 7. Trade Exits page, 17 8. Setting Up Your FX Accucharts page, 18 9. Money Management page, 19 10. Summary page, 20 3

Introduction Congratulations, you now have my Forex Renko Charts FX Trading System in your hands. I am going to show you 2 simple yet powerful FX trading setups. Keep It Simple! The Forex Renko Charts FX Trading System is a disciplined approach to controlling risk and making money. These are your 2 primary objectives for trading. Over 95% of FX Traders fail for 3 reasons: 1. Lack Profitable Trading System 2. Lack Discipline to Follow Trading System 3. Lack Control of 2 Emotions: Fear & Greed 4

FX Accucharts Charting is an essential tool for any forex trading strategy. I use FX Accucharts which are FREE from FX Solutions UK (fxsol.co.uk) if you open a DEMO account. The Forex Renko Charts FX Trading System uses FX Accucharts. All of the technical setups and parameters you will read about in this book are based on FX Accucharts. FX Accucharts provides the forex trader the convenience of trading and analysis together by allowing traders to place trades from the charts. FX Accucharts is fully customizable to fit and complement your forex trading style. 5

Basic Price Charts Bar Chart Candlestick Chart 6

Renko Bar Charts Renko Bar Chart 7

Renko Bar Basics How is a 10 pip renko bar formed? 1. A new green (UP) renko bar forms only after the current price surpasses the top of the previous renko bar by 10 pips. 2. Green renko bars open on the bottom of the bar and close on the top of the bar. Green renko bars display the closing price which is also the HIGH price for this green renko bar. 3. A new red (DOWN) renko bar forms only after the current price surpasses the bottom of the previous renko bar by 10 pips. 4. Red renko bars open on the top of the bar and close on the bottom of the bar. Red renko bars display closing price which is also the LOW price for this red renko bar 8

Renko Bar Advantages Renko Bar Charts offer the following advantages: 1. Visual Appeal 2. Zero Indicators 3. Objective Decision-Making Process 4. Filters Out Market Noise, i.e. whipsaws 5. Displays Areas Of Support And Resistance 6. Based On Price Action (movement of prices) Renko bars remove the distractions seen on typical bar or candlestick charts. These distractions include whipsaws such as long wicks, false breakouts and price volatility. Renko bars clearly define current trend and key price levels such as support & resistance and trend reversals. 9

#1 Buy Setup Rules A #1 Buy Setup represents a pullback in a current trend. Look for the following: 1. A trend (x-y) or sequence of green renko bars followed by a pullback (y-z) of red renko bars. 2. Wait patiently for the 1 st green renko bar (Trigger Bar) to close immediately following the pullback. Enter trade here. 3. Make sure the last red renko bar (z) on the chart is higher than the last red renko bar in the previous pullback (x). 4. This setup is a higher swing low. Place your stop loss underneath this higher swing low (z) or the previous swing low (x) 10

#1 Buy Setup Chart 11

#1 Sell Setup Rules A #1 Sell Setup represents a pullback in a current trend. Look for the following: 1. A trend (x-y) or sequence of red renko bars followed by a pullback (y-z) of green renko bars. 2. Wait patiently for the 1 st red renko bar (Trigger Bar) to close immediately following the pullback. Enter trade here. 3. Make sure the last green renko bar (z) on the chart is lower than the last green renko bar in the previous pullback (x). 4. This setup is a lower swing high. Place your stop loss above this lower swing high (z) or above the previous swing high (x) 12

#1 Sell Setup Chart 13

Scalping - Setups 1. Determine How Much Risk: Money Management 2. Identify a FX trade setup (Buy or Sell Setup) 3. Enter trade 4. Manage trade/exits Renko Bar Chart Parameters: 1. 2 or 5 PIP renko bars 2. Use a 10 TICK chart (Look for CLOCK icon) 3. EUR/USD, GBP/USD, USD/CAD, AUD/USD, USD/CHF, USD/JPY, NZD/USD, CAD/JPY, EUR/JPY and GBP/JPY Trade Exits: 1. 3 Renko Bars Reversal: 3 renko bars of opposite color appear and close on charts. Use a 6 to 15 pip trailing stop if you want to automate this type of Trade Exit. 2 Fixed Amount: 100% exit at 1st profit target. Use a fixed take profit to automate this type of trade exit. 14

Swing - Setups 1. Determine How Much Risk: Money Management 2. Identify a FX trade setup 3. Enter trade 4. Manage trade/exits Renko Bar Chart Parameters: 1. 10 PIP renko bars 2. 1 minute time frame 3. EUR/USD, GBP/USD, USD/CAD, AUD/USD, USD/CHF, USD/JPY, NZD/USD, CAD/JPY, EUR/JPY and GBP/JPY Trade Exits: 1. 3 Renko Bars Reversal: 3 renko bars of opposite color appear and close on charts. Use a 30 to 50 pip trailing stop if you want to automate this type of Trade Exit. 2 Fixed Amount: 100% exit at 1st profit target. Use a fixed take profit to automate this type of trade exit. 15

Position - Setups 1. Determine How Much Risk: Money Management 2. Identify a FX trade setup 3. Enter trade 4. Manage trade/exits Renko Bar Chart Parameters: 1. 25 PIP renko bars 2. 1 minute time frame 3. EUR/USD, GBP/USD, USD/CAD, AUD/USD, USD/CHF, USD/JPY, NZD/USD, CAD/JPY, EUR/JPY and GBP/JPY Trade Exits: 1. 3 Renko Bars Reversal: 3 renko bars of opposite color appear and close on charts. Use a 75 to 125 pip trailing stop if you want to automate this type of Trade Exit. 2 Fixed Amount: 100% exit at 1st profit target. Use a fixed take profit to automate this type of trade exit. 16

Trade Exits Trade Exits are a very important function of a trader s profit/loss performance. Ideally each individual forex trader needs to find an exit strategy which fits his/her trading personality and trading objectives. Whether you are a Scalper, Swing or Position trader, you need to experiment with your trade exits in an effort to maximize your profits. Scalping: I suggest starting with 3 to 5 Renko Bars or a 10 to 15 pip stop loss and using a 1:1 take profit or use a 10 pip trailing stop loss set on initial 15 pip stop loss. Swing: I suggest starting with a 3 Renko Bar or 30 pip stop loss and using a 1:1 or 2:1 take profit or use a 10 pip trailing stop loss set on initial 30 pip stop loss. Position: I suggest starting with a 3 Renko Bar or 75 pip stop loss and using a 1:1 or 2:1 take profit or use a 10 pip trailing stop loss set on initial 75 pip stop loss. 17

Setting Up Your Charts After you install FX Accucharts, double click the FX Accucharts icon on your desktop and follow these steps to set up your Renko Bar charts: 1. click the view tab and choose navigation pane 2. double click the currency pair of your choice 3. click the x to now close the navigation pane 4. stretch chart to fit your screen by grabbing with your mouse 5. right click anywhere on chart and choose properties 6. click time region and change records to 25,000 7. click + in front of currency pair and click display 8. click renko in the chart mode 9. type in 0.0002 for a 2 pip renko bar in price step, or 10. type in 0.0010 for a 10 pip renko bar in price step, or 11. type in 0.0025 for a 25 pip renko bar in price step 12. if currency pair is a jpy cross use 0.02, 0.1, 0.25 13. click type and choose 1 minute for intraday settings 14. click ok then click file tab and choose save workspace as 15. create a workspace file name and click save choose fewer records for time region if you are using scalping settings. choose more records if you want to see more data on your screen. in the lower right corner of your screen is a blue flag, click this blue flag and choose chart reset anytime to center data 18

Money Management Keep your % risk the same for each trade. 1. Conservative: 0.5 % - 1.0 % 2. Moderate: 1.0 % 3.0 % 3. Aggressive: 3.0 % - 5.0 % Start conservative until you develop the discipline to recognize the 4 FX trade setups and execute them without making any mistakes. Adjust your % Risk each Week. This approach will protect your trading capital when you are losing trades, and allow you to grow your capital faster when you are winning trades. Always keep your % Risk where you decide it needs to be. Adjust your position size if you need to use a larger stop loss. Do not use a larger % Risk with larger stop loss. 19

Summary Quick Summary: A key point to keep in mind, Renko Bar Charts are not an exact science. Trade the direction and be flexible with your stop loss placement. Give your trades room to breathe. Successful FX traders are patient and disciplined. You now have the tools to succeed. You are 100% responsible for your FX trading success and you can achieve it by believing in yourself. If you fall down, get back up. Winners never Quit. There is no Holy Grail. Successful FX trading begins in your mind. Develop patience and discipline. Apply yourself 100% to the 2 FX trading concepts in this manual. YOU can do it! 20

Additional Notes You do NOT have to use FX Accucharts. Feel free to use ANY renko charts. I do not place any trades with FX Solutions, I only use their free forex charts. I have been using their charts for 5+ years. I watch the FX Accucharts for my renko bar setups and manually enter any scalping trades on the FX Broker I am currently using. I will sometimes enter pending orders if I am using larger renko box sizes such as 25, 33 or 50 pip for position trading. 21