As day traders we are all familiar with the renko chart as a powerful non time based approach to trading, and one which is the ‘go-to’ chart for scalping traders across all markets. So how has this been performing in these wild markets? And looking at the three examples here, you might be forgiven in thinking that nothing has changed. The charts here are based on the YM Emini, but it could equally apply to the ES Emini and also the NQ Emini.
Across the top are three charts with the Renko optimiser for NinjaTrader. This indicator from Quantum Trading delivers the optimal Renko brick size for all markets and timeframes, so you are always trading in harmony with the market. These have been set to 1minute, 2 minute and 3 minute, with the equivalent time chart immediately below from left to right. The Renko charts appear as you would expect, smoothing out the price action into a series of trends confirmed and supported by the Quantum trends and trend monitor indicators.
However, look more closely at the brick sizes being delivered by the indicator. The 1 minute is 98 points, the 2 minute is 123 points and the 3 minute is 149 points. Each brick, therefore, represents $490, $615 and $745 respectively across the three timeframes assuming one mini Dow future. In ‘normal’ trading conditions these optimal sizes would be somewhere between 5 to 20 across this time slice. This snapshot of the market reinforces the extreme nature of price action at present, but in addition also displays the power of the indicator which delivers the optimal setting for trading, whether in extreme conditions as now or for normal conditions once they return.
By Anna Coulling
Charts from NinjaTrader and indicators from Quantum Trading
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