The reason why I use Mean Renko candles is very simple. Mean Renko boxes filter out price ranges and make the chart look very clean and transparent. By adding the usual Moving Averages to such a chart, the overall picture will give you a quick overview of when price is trending and when it is consolidating.
Another very important reason for using Renko candles for scalping is the need to catch smaller movements on the charts. Thanks to this possibility, you can catch a few or even a dozen opportunities to earn money every day. Using this simple method it is enough to focus on one or two instruments without having to search the Market every day for bargains.
What is the difference between Renko boxes and Japanese candles?
Renko candles are not time dependent as is the case with the classic Japanese candle. For example, if you set the charts to the H1 timeframe, a new candle will appear every hour. It doesn’t matter if the price moves 1 or 100 pips in an hour. You will still see one new candle every hour. It is different when dealing with Renko. Renko boxes are equal because they only measure volatility (pips) and there is no time for them. If the Renko box is set to 10 pips, a new candlestick will only appear on the charts when the price moves higher or lower (depending on from the trend direction) by 10 pips. Therefore if you set your Renko to 10 pips per candle, you will only see a new candle if the price moves 10 pips up or down. If the price only moves 9 pips in one direction and then moves 9 pips again in the opposite direction, no new candlestick will form, because still 1 pip is missing to make a new 10 pips box.
The picture shows a comparison of Renko candles with Japanese candles.
For the construction of the scalping system we will use Mean Renko, which are a variation of the standard Renko candles.
The software that will be needed to build a fully Automatic System.
Mean Renko candle generator
We have a choice of two stable versions. One free called STG Renko Chart generates Renko or Mean Renko candles on the Offline chart. The STG Renko Chart Remote will also be useful to easy change the size of the Renko box.. The second option is a professional MeanrenkoBar or an Omnia Bar combine which are commercial. Additionally the Omnia Bar can generate all possible candle combinations, eg Range Bars, Renko, Mean Renko, Flex Renko etc. Similarly, there is an additional indicator called Omnia Remote which allows you to quickly change the size of the box and switch the beginning of the trading session.
Renko Trade Panel
This software will allow us to completely automate trading and significantly reduce the time spent in front of the computer to a minimum.
Signals that are used to take a position are based on EMA and SMA averages so I have used a ready-made indicator from the MMD strategy to visualize the averages on the chart. It serves only to observe the operation of the system and it does not affect the operation of the EA itself, so you can of course omit this indicator.
- Copy the file named Renko Trade Panel to the Experts folder in MT4
(File >> Open Data Folder / MQL4 / Experts)
- Copy the file named STG_RenkoChart, STG_RenkoChart_Remote and CloudsbyMMD to the Indicators folder in MT4
(File >> Open Data Folder / MQL4 / Indicators)
- After copying the files to the appropriate directories close and restart the MT4 platform.
- Run STG_RenkoChart by dragging it to the Graph Window from the Navigator or by double-clicking it. After STG_RenkoChart is configured the settings can be saved as a settings file.
- In the settings select the type of generated boxes, i.e. Mean and the size of the box (for DAX it will be 40 points, for some brokers 400 points)
Click the M3 button, then the offline chart window will open automatically.
Run STG_RenkoChart_Remote by dragging it to the Graph Window from the Navigator or by double-clicking it.
Launch CloudsbyMMD by dragging it to the Graph Window from the Navigator or by double-clicking it.
Change your Moving Averages settings:
Period 1 = 12 >>>Renko Trade Panel >>> MA_Fast = 12
Period 2 = 24 >>>Renko Trade Panel >>>MA_Slow = 24
Period 3 = 36 >>>Renko Trade Panel >>> MA_Trend = 36
Launch the Renko Trade Panel by dragging it to the Chart Window from the Navigator or by double clicking.
- Upload to Renko Trade Panel default settings Mean Renko Scalping System (MRSS.set)
- Copy the file named MRSS.set to the Presets folder on MT4
(File >> Open Data Folder / MQL4 / Presets)
Mean Renko Scalping System
Full description of the system, chart templates and the EA settings file for DAX
is sent together with the Renko Trade Panel.