The first step on the road to perfection is to focus on the essentials. There is an ancient Japanese proverb, which sounds like this. It hasn´t been put here by accident.
On the following pages a centuries-old Japanese technique, the actual application of the Renko chart will be discussed. According to the descriptions, rice traders used this technique to visualize the movement of the rice prices. Were they the first futures traders?
The Japanese culture is known for simple elegant forms and clear lines, both in the world of design and thought, but this simplicity originates from reducing things to their most essential content.
If we see a chart of a currency pair, index or a bond today, we can read a lot of information out of it. Opening and closing prices can be seen up to 1 minute resolution, peaks, volumes, etc. Now if we pack up a few more indicator to the chart, draw more trend lines, look at Fibonacci-levels etc. we believe we know almost everything about the current status of the market, but what does all this really tell us about the future? Does it really help us to make trading decisions, or is all that wealth of information just giving us the illusion of predictability?
The Renko charts do not care about the time, but are solely focused on the movements. It only shows that the price has taken a certain distance or not. No matter how long that takes. This creates a clean chart with no unnecessary information, which is much easier to read.
This is the basic of my winnig strategy.
