Forex glossary
Renko Charts
Renko draws bricks after price moves by a fixed size or volatility-based threshold. In a common construction, a reversal brick requires two brick sizes from the last brick close. Bricks do not represent equal durations; data resolution, price source and platform rules affect the display.
Illustrative example
How does it work in practice?
Assume an upward brick spans 100 to 102 USD with a fixed two-dollar size. Another upward brick forms at 104, while a reversal forms at 98, requiring a four-dollar retracement from 102.
A case to work through
Two brick sizes for reversal
Hypothetically, the last upward brick closes at 60, size=3 and reversal requires two sizes.
- Upward continuation requires reaching 63.
- A reversal brick requires 60−6=54 rather than only 57.
What follows? Record continuation and reversal thresholds separately.
Example boundary: This is a specific construction rule; synthetic bricks do not confirm available fills.
A useful distinction
Renko Charts / Kagi Charts
Renko builds movement-sized bricks; Kagi draws lines and reverses after a specified threshold.
Check your understanding
Calculate a reversal level under a specified Renko construction.
Show the answer and explanation
92
Subtract two brick sizes from 100: 100 − 2 × 4 = 92. This result applies only to the stated reversal rule.
Volatility and transformed data
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Read the fuller explanation
Related terms
Sources and documentation
- TradingView – Renko
Brick size, common reversal construction and input-resolution limitations.
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