Renko Bar Based Trading System for ThinkorSwim

[Chence27]

Thanks @rad14733 ... filling in all of the puzzle pieces.

@mdtn Here you go. Note: link 2 below is for my second screen

https://tos.mx/JrgOXPV

https://tos.mx/IUt1ghA

I really like your setup, especially your second screen chart. Could you tell us a bit about how you use it all together?

 

[MJK3536]

Here is the link to my shared workspace, complete with my customized Studies... Comments welcomed... If you have questions, I'll do my best to answer them...

https://tos.mx/DHOcwrT

Awesome layout - well done.

 

[MJK3536]

@rad14733 This is in reference to your great Renko work. I changed the Hull Moving Average to 8 and used an indicator called UpperHullConcave. I didn't make it but pretty sure I found it on this site. Either way the author is Seth Urion (Mahsume) I have a TOS layout for you if you want to see it. Seths concave study shows signals even a little earlier.

 

[Satmon06]

@rad14733 This is in reference to your great Renko work. I changed the Hull Moving Average to 8 and used an indicator called UpperHullConcave. I didn't make it but pretty sure I found it on this site. Either way the author is Seth Urion (Mahsume) I have a TOS layout for you if you want to see it. Seths concave study shows signals even a little earlier.

Can you share your Layout?

 

[MJK3536]

Can you share your Layout?

Here you go. https://tos.mx/mFiJhJY

 

[rad14733]

@MJK3536 I'll give it a look...

Edited to add: Nicely structured chart/indicator setup... The one thing I find most invaluable with the Renko Bar setups is the overlayment of the RSI as it definitely helps keep you in trades that the Renko Bar reversal might otherwise indicate premature exit and I consider the practice a must...

 

[MJK3536]

@MJK3536 I'll give it a look...

Edited to add: Nicely structured chart/indicator setup... The one thing I find most invaluable with the Renko Bar setups is the overlayment of the RSI as it definitely helps keep you in trades that the Renko Bar reversal might otherwise indicate premature exit and I consider the practice a must...

Good to know - thanks for this. Very good to learn.

 

[Let the Bulls Run]

Here you go. https://tos.mx/mFiJhJY

@MJK3536 thanks for sharing. I noticed your layout is defaulted to /ES Mini. Is this something you regularly trade? Would you mind sharing your entry/exit strategy? This is a thread that I've been following from it's initiation, and it's opened my eyes in many ways. Especially using the Renko Bar setups.

 

[MJK3536]

@MJK3536 thanks for sharing. I noticed your layout is defaulted to /ES Mini. Is this something you regularly trade? Would you mind sharing your entry/exit strategy? This is a thread that I've been following from it's initiation, and it's opened my eyes in many ways. Especially using the Renko Bar setups.

I use this to trade, at the very least, review various futures. I mostly trade ES, NQ, Crude, Natural Gas, Gold and Silver. I use the Strat by Rob smith to look for setups and then once I am in a trade, will put a Strat chart over a Renko Chart to help me avoid whip.

 

[Trader_Rich]

Good morning all, I was very excited to find this site and better yet find this thread talking about using Renko bars. I started using Renko bars a few months ago to scalp /ES, /YM, /CL, and /NQ (in slower time periods) and feel like I am honing a system that truly works. I'd appreciate any feedback as I feel that there may be a better way to confirm an entry than using Waddah, Awesome Osciallator, and the LBR 3/10. Below are my settings and rules:

Lets see if this chart share will work:
https://tos.mx/cYHAXu7
Indicators & Settings

• Renko Bars set at 3 Ticks
• Ichimoku Cloud with Lagging Span
• Bill Williams Alligator (or Bollinger Bands)
• 200 EMA
• Daily Pivot Points
• Waddah Attar – dead zone set at 25
• Williams Awesome Oscillator – dead zone set at 2.5
• LBR 3/10 – Dead Zone set at 1.5

Explanation

• Ichimoku and EMA Identify Trend
• Only take longs when price is above Ichimoku and EMA
• Only take shorts when price is below Ichimoku and EMA
• Lagging span must be out of the cloud
• Do not trade if price is between cloud and EMA
• Alligator Identifies entries
• Only take longs when price is above Alligator Green Line
• Only take shorts when price is below Alligator Green Line
• Confirmation
• Take Longsonly if:
  • Waddah is Green and touching/above dead zone
  • AO is Green and touching/above dead zone
  • LBR is Green and touching/above dead zone
• Take Shortsonly if:
  • Waddah is Red and touching/above dead zone
  • AO is Red and touching/Below dead zone
  • LBR is Red and touching/below dead zone

 

[Robster021]

Thank you @Trader_Rich. What are your TP target and SL? That's what I struggle with during slow times. I usually trade futures PM & AM around my 9-5'er.

 

[Trader_Rich]

Thank you @Trader_Rich. What are your TP target and SL? That's what I struggle with during slow times. I usually trade futures PM & AM around my 9-5'er.

Since I primarily trade /ES, I have a 10 tick SL and a 6 tick TP with a trail that kicks in after my first 6 ticks are met.

 

[Robster021]

While we wait for TOS to sort their out I'm taking a look at your screenshot you share. Which line is the Alligator Green Line?

• Alligator Identifies entries
• Only take longs when price is above Alligator Green Line
• Only take shorts when price is below Alligator Green Line

 

[Trader_Rich]

While we wait for TOS to sort their out I'm taking a look at your screenshot you share. Which line is the Alligator Green Line?

• Alligator Identifies entries
• Only take longs when price is above Alligator Green Line
• Only take shorts when price is below Alligator Green Line

It's the "lips" of the William's Alligator that I believe is an SMA 5. If you are looking for longs you want price to be above this line, and this line should be above the 200 EMA and Ichimoku Cloud (and vice versa for shorts)

Below I have zoomed in on a long entry yesterday at 11:05 CST whereas price is above the 200 EMA and Cloud, the Alligator "green line" breaks the cloud, and all 3 of my oscillators are above their designated dead zones (ice blue lines)

 

[rad14733]

@Trader_Rich That sounds like a fairly solid trading system... Have you tried using Waddah Attar Explosion with Histogram instead of simple lines...??? I have a preference for Histograms as they provide me with more information than lines do... But, hey, if lines work for you, great...!!!

Also, it's common practice to have your take-profit greater than stop-loss because even if you only win 50% of your trades you come out ahead... With your method a 50% win rate would come out at a loss... A 1.5:1 Win:Loss rate is the minimum I shoot for and if a trade starts lagging I'll exit at the 1:1 mark...

 

[Trader_Rich]

@Trader_Rich That sounds like a fairly solid trading system... Have you tried using Waddah Attar Explosion with Histogram instead of simple lines...??? I have a preference for Histograms as they provide me with more information than lines do... But, hey, if lines work for you, great...!!!

Also, it's common practice to have your take-profit greater than stop-loss because even if you only win 50% of your trades you come out ahead... With your method a 50% win rate would come out at a loss... A 1.5:1 Win:Loss rate is the minimum I shoot for and if a trade starts lagging I'll exit at the 1:1 mark...

I think the reason I went with lines as opposed to the Histogram on WAE was because it made my eyes "swim" but I'll play with putting a Histogram back up.

As for my SL & TP, I've noticed that the ones that win only have a pullback of 4-6 ticks, I just haven't been brave enough to change it yet. I'm also experimenting with moving my TP to 5 ticks, rather than 6 but that is probably just splitting hairs.

This strategy has forced me to become super patient, but it keeps me out of a lot of bad trades but I like it in what I refer to as "methodically moving markets"....not too fast, not too slow. I absolutely can't use this on intraday trades on NQ during fast markets, however at night when NQ is lumbering along it works better....or maybe I can just analyze and pull the trigger better.

I just feel like there should be a better indicator in place of the AO and LBR

Also, something I've been meaning to ask...if we use Renko bars is there a way to set an alert if a condition is met....like if WAE crosses a given dead zone or if the lagging span breaks the cloud. I called the TOS help desk and everyone their acted like Renko bars were from Mars and only knew how to do so on time based bars

 

[rad14733]

@Trader_Rich I think if you get used to the WAE Histogram that you would discover than you can gain more meaningful information at a quick glance... But YMMV...

As for indicators, I have really become fond of the Didi Index and ErgodicOsc indicators... I run customized versions of both but the default versions work fine... I just added custom bells and whistles, one being adding a MA to the ErgodicOsc... On the Didi Index I have added MA crossover arrows and one the ErgodicOsc I added histogram weakening below/above MA dots... Regardless of what indicators I try I keep coming back to these two... I have also become fond of TTM_Squeeze and TTM_Squeeze_Pro... Food for thought...

 

[Robster021]

Hi @Trader_Rich, Doing some backtesting now and had a QQ. Do you have WAO dead zone set to 1.5 or 2.5?

• Williams Awesome Oscillator – dead zone set at 2.5

I'm also finding a SL of 7 with 2 contracts at TP of 12 with 1 contract as a runner working well. Trading /ES

Thanks!

 

[Trader_Rich]

Hi @Trader_Rich, Doing some backtesting now and had a QQ. Do you have WAO dead zone set to 1.5 or 2.5?

• Williams Awesome Oscillator – dead zone set at 2.5

I'm also finding a SL of 7 with 2 contracts at TP of 12 with 1 contract as a runner working well. Trading /ES

Thanks!

My WAE Dead Zone is set at 25 (not .25) for ES. I believe YM I have it set to 100

Lets see if this chart share will work:
https://tos.mx/cYHAXu7

 

[Desrex]

Thanks for sharing your code above... I'll definitely give it a go... I think the reason you are having better luck with Options is because they are the instrument it was designed for... While I've back-tested with Stocks and ETF's, some of the settings would need to be adjusted for best results...

First off, nice job my dude! I've been lurking around this site for a while now and you got me to finally sign up! quality stuff. My questions is if I wanted to day trade stocks and/or forex what would you recommend to be changed?