How To Trade Profitably With Renko Charts?
In the world of trading cryptosystems or physical assets such as oil, it is always advisable to have tools. Many platforms have diagrams of market behaviour, allowing you to predict market behaviour.
Renko charts are one of the newest options that investors have to decide and stay in the best possible position. Renko charts are diagrams based on blocks or bricks of the famous game Genka. The chart establishes a place on a brick only that base on the money.
The chart shows your initial position, along with the probabilities of rising or falling prices. In this case, you can decide to sell and be in a better place or wait for the next block. The time between each block is very variable and can take hours or even days, so a lot of patience is required.
An example of a Renko chart - EURUSD weekly timeframe
When changing blocks, you can choose what to do and make the best decision. In many cases, it is good to be patient, but also not to wait too long because you can start the descending blocks. In this case, you could be in a worse position than you started if you are not careful and attentive in the behaviour of blocks.
The tool is very new, so not all sites have them available for implementation. There are many secondary sites on the web that offer the service. The best option, in this case, is to find a trading site with this integrated tool.
Advantages of the Renko diagram
The main advantage of the Renko diagram is its ease of interpretation by the user. Novice users usually do not have extensive knowledge in studying and forecasting traditional charts. It is one of the leading causes of new people losing opportunities to win.
An example of this situation is leaving early before the price rises end. In this case, you may be in a favourable position, but you could be in an even better one.
Another example is to wait too long, thinking that the behaviour is going up. Many people expect to see if their stocks go up when the action goes down. In this case, you can end up in a worse position than the one you started in, and end up losing.
Disadvantages of Renko's diagram
The main disadvantage of the Renko diagram is that it is not constant over time. Blocks can occur at any time, either up or down. As said before, you have to be patient while waiting for the next block and the chances to keep climbing.
For people who use the traditional system, it's a bit confusing. The vast majority of statistical methods are related to time, similar to fundamental physics. So this paradigm shift is a bit complicated for traditional investors.
The most advisable thing to do before using it is to learn how to do it with a course, tutorial of it. Remember the saying that the tool does not affect much unless you know how to use it efficiently.
To conclude, the Renko diagrams are tools to allow your investments to be successful. It is essential to check if the trading platform is available to determine.