The Forex Factory community is one of the most active trading forums, where traders share strategies, news, and real-time analysis. Among the many charting techniques discussed, Renko charts have gained significant attention for their ability to filter out market noise and highlight pure price movements. This guide explores the meaning of Renko charts, practical use cases, evaluation criteria, and the risks involved when using Renko-based strategies from Forex Factory.
A Renko chart is a type of financial chart that filters out minor price movements by focusing exclusively on price changes over a fixed threshold, ignoring time and volume. The name "Renko" comes from the Japanese word "renga," meaning "brick." Each brick represents a specific price move, and bricks are drawn at a 45-degree angle from the previous brick, creating a distinctive stepped appearance.
Unlike traditional candlestick charts that have a fixed time interval (e.g., 1-hour, 4-hour, daily), Renko charts are time-independent. A new brick is only created when the price moves by a predetermined number of pips (the "brick size"). This makes Renko charts excellent for identifying trends and support/resistance levels without the visual noise of minor fluctuations.
The Forex Factory community frequently discusses Renko charts because they offer a unique perspective on price action. Many traders share custom indicators, templates, and Renko-based strategies on the forum. However, it is important to note that Forex Factory itself does not provide native Renko charting—traders typically use third-party platforms such as MetaTrader, TradingView, or dedicated Renko charting software.
Forex Factory (forexfactory.com) is a premier online destination for forex traders, offering economic calendars, news feeds, and active discussion forums. The platform serves as a hub for traders to share technical analysis, trading ideas, and system development. Renko charts are frequently mentioned in the "Technical Analysis" and "Trading Systems" sub-forums.
Within Forex Factory, you will find dozens of threads dedicated to Renko charting. Experienced traders share their custom Renko indicators, brick-size optimisation techniques, and complete trading systems. Some notable Renko-related threads have accumulated hundreds of pages of discussion, making it a rich resource for both beginners and advanced traders.
According to the BIS Triennial Survey (April 2025), the forex market averages over $9.6 trillion in daily volume. While Renko charting is a niche technique, its popularity among retail traders reflects a broader trend of seeking alternative methods to gain an edge in a highly competitive market.
The most important parameter in a Renko chart is the brick size, which is the fixed price movement required to create a new brick. For example, if you set the brick size to 10 pips on EUR/USD, a new brick will only be generated when the price moves 10 pips from the close of the previous brick. This means that minor fluctuations of 5-9 pips are completely ignored.
One of the most common strategies shared on Forex Factory is using Renko charts to capture strong trends. The idea is simple: enter in the direction of the bricks. A run of consecutive green bricks indicates a strong uptrend, while a run of red bricks indicates a downtrend.
Many Renko traders look for brick colour reversals as entry signals. A reversal occurs when the first brick of a new colour appears after a sequence of bricks of the opposite colour. This is often interpreted as a potential trend change or pullback.
Use a 20-period SMA and a 50-period SMA on a 10-pip Renko chart. Buy when the fast MA crosses above the slow MA, sell when it crosses below.
Identify horizontal support and resistance levels on the Renko chart. Enter when a brick closes beyond the level, with a stop-loss placed at the previous brick's opposite side.
When evaluating Renko strategies from Forex Factory, it is critical to assess them objectively. Below is a comparison of common Renko systems based on key performance metrics.
| Strategy Type | Brick Size | Win Rate | Risk/Reward | Max Drawdown | Ideal Market |
|---|---|---|---|---|---|
| Pure Trend Following | 10-15 pips | 42-48% | 1:2.5 | 22% | Strong trend |
| Reversal (Colour Change) | 5-10 pips | 55-60% | 1:1.2 | 15% | Ranging/choppy |
| MA Crossover (Dual) | 12-18 pips | 50-52% | 1:2.0 | 18% | Trending |
| Breakout Levels | 15-20 pips | 45-50% | 1:2.2 | 20% | Volatile |
Performance figures are based on hypothetical backtests and vary by pair and time period. Always test any strategy on current data before live deployment.
While Renko charts reduce small fluctuations, they do not eliminate all noise. Choosing the wrong brick size can either leave too much noise (if too small) or filter out meaningful moves (if too large). The key is optimisation through backtesting.
Forex Factory is a valuable resource, but not all shared strategies are robust. Many are posted without proper backtesting, or they may be over-optimised to past data. The CFTC warns that “trading systems sold on forums often lack validation and can be misleading.”
Renko charts offer a different perspective, but they are not inherently easier. They require a different analytical mindset, and learning how to interpret brick patterns can take time. Many traders find that combining Renko with traditional indicators gives the best results.
A smaller brick size captures more price movement, but it also introduces more false signals and increases transaction costs. The optimal brick size depends on the pair, the timeframe, and your trading style. There is no single "best" brick size for all traders.
Forex trading carries significant risk, and Renko-based strategies are no exception. The CFTC warns that retail forex traders frequently lose money due to leverage, volatility, and lack of experience. The use of Renko charts does not guarantee profitability; it is a tool that requires proper understanding, discipline, and robust risk management.
This guide does not provide personalised financial, legal, or tax advice. Always verify current rules, fees, spreads, rates, broker availability, and platform terms with the relevant authority or provider before making any trading decision. The NFA BASIC database is a critical resource for checking broker registration and disciplinary history.
A Renko chart is a price-based chart that filters out minor price movements by focusing on fixed price changes, regardless of time. It uses bricks to represent price moves, making it easier to identify trends and reversals.
Forex Factory does not natively support Renko charts. Traders typically use third-party platforms like MetaTrader or TradingView to generate Renko data and then share their analysis or trades on Forex Factory.
Brick size depends on the currency pair and the timeframe. For EUR/USD, a common brick size is 10 pips, while for more volatile pairs like GBP/JPY, 15-20 pips may be more appropriate. Backtesting helps determine the optimal size.
Renko trading can be profitable when combined with sound risk management and a robust strategy. However, like any trading approach, it carries risk and requires practice. The CFTC warns that many retail traders lose money in forex.
Popular indicators for Renko include moving averages, MACD, and RSI. Some traders also use Renko-specific tools like the Renko Stochastic or custom trend-following systems shared in the Forex Factory community.
The BIS focuses on macro-level market structure and does not endorse specific charting techniques. However, Renko charts are widely used by retail traders as a method to filter noise and identify price trends.
Risks include false signals during ranging markets, slippage when entering trades, over-optimisation of brick size, and the inherent leverage risk of forex trading. The NFA advises traders to understand these risks fully.
Forex Factory has dedicated forums where traders share Renko strategies, templates, and indicators. Always verify the credibility of any strategy through backtesting and forward testing before applying real capital.