A Renko chart throws away time. Instead of one candle per five minutes or per hour, it prints a "brick" only when price moves a set amount — say ten pips. If price crawls sideways for six hours, the chart adds nothing. If it runs forty pips in a minute, you get four bricks. The result strips out most of the small back-and-forth and leaves a clean staircase of trend, at the cost of the timing information a normal chart keeps.
How it is built
You pick a brick size. A new brick prints in the same direction once price moves one brick size beyond the last brick. To reverse, price usually has to move two brick sizes the other way — one to cancel, one to open the new colour. Time, volume and the small wicks in between are simply not recorded. Two things follow from that: the chart only updates when price moves enough, and the last brick can sit unfinished until price commits.
What it helps with
Renko is good at one job: making trends and horizontal levels obvious. Support and resistance that look ragged on a candlestick chart often line up as clean brick edges. Ranges shrink to a few bricks flipping colour. For traders and EAs that chase trends and get chopped up in the noise between them, that filtering is the whole point — fewer signals, and the ones left are larger moves.
A brick size is a noise filter you set by hand. Too small and you are back to reading noise; too large and the chart tells you the trend turned long after it did.
A worked example
Say you trade EURUSD at about £8 a pip and set a 20-pip brick. Because a reversal needs two bricks, price has to travel roughly 40 pips against the trend before the chart prints a reversal at all. On one standard lot that is about £320 of move before Renko admits the trend has turned. Drop to a 5-pip brick and the chart reacts far sooner — but now it flips colour on every small wobble, and you are back to the whipsaw you were trying to escape. There is no setting that gives you both.
Common misconceptions
- Ignoring time does not ignore risk. A quiet chart can still be one news spike from a large move; Renko just will not warn you it is coming.
- Some Renko uses ATR bricks that recalculate. The historical chart can look cleaner than it was live, because the brick size was chosen after the fact. Test on fixed bricks before you trust it.
- The last brick is not final. Backtests that assume you acted on a brick the moment it appeared are usually flattering — you often could not have.
The Karnek note
Karnek records what your account actually did — every fill, at the time and price it happened — regardless of the chart you traded from. It reads the live terminal only, so it can track a Renko-based EA without ever opening, closing or altering a position.
Written and reviewed by the Karnek Research team. Last updated August 2026.
Educational content only - not financial advice. Past performance does not predict future results. Trading carries significant risk.