Definition
Renko Chart
A Renko chart plots price as bricks of a fixed size, ignoring time, to filter noise and highlight the underlying trend.
Instead of one candle per time period, a Renko chart adds a brick only when price moves a set amount, regardless of how long it takes. This strips out small fluctuations and time, leaving a clean view of trend direction — a new brick in the same direction confirms the trend, a reversal brick signals a possible change.
Indian traders use Renko on Nifty, Bank Nifty, and stocks to cut through choppy price action and stay in trends, often pairing it with indicators for entries. Because it ignores time and minor moves, it can lag at turning points, so it suits trend-following over precise timing.
Related terms
- SupertrendSupertrend is a trend-following indicator that plots a line below price in uptrends and above price in downtrends, using ATR.
- Candlestick PatternCandlestick patterns are formations of one or more candles that suggest likely shifts in market sentiment.
- BreakoutA breakout is when price moves decisively beyond a defined support, resistance, or pattern boundary, often starting a new move.
- TrendlineA trendline is a straight line connecting a series of highs or lows to visualise the direction and slope of a trend.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.