21# Renko Briks Forex Trading System

We need the market to go in one direction for 3 Renko bricks, then

we shall enter and trade in the opposite direction of the

market.

Here are a couple of entry signals just to show you and

make it very clear. The white lines show our Buy entries.

When 3 Red bricks formed we enter a Buy

The same rule applies to sell signal, after 3 Blue bricks we

Sell.

In fig. we would have placed our sell limit order at 1.5020

in anticipation that the market will trade to that level soon.

If the market did not get there right away but went down and

formed a red brick then we have to remove our Sell limit

pending order and wait for another signal coming.

We have talked about Entries, now let’s talk about managing

our trade and exit strategy. The rules are quite straight

forward and easy to understand and should be executed

mechanically.

Setting: 3 Brick Reversal

• Renko Brick Size 20 pips

• Entry after 3 new bricks of same color are formed, then

you trade in the opposite direction. Example: 3 red bricks

are formed then you place a buy order. See fig below.

• Take Profit set at 3 bricks away (60 Pips).

• Stop Loss set at 2 bricks below entry (40 Pips).

• No break even or Trailing.

• Let trade either hit Take Profit or Stop Loss.

• No hedging or trading in both directions.

Example: once you are in a Buy trade you don’t do any

thing (don’t open a sell or another buy) until the trade is

closed then you look for the next entry, which is 3 new

bricks of same color are formed.

The above is a representation of how a trade will look like. For

instance we buy @1.4900 TakeProfit (TP) set @ 1.4960.

Looking at fig.13, Trade 1 was taken at 1.4960, it closed for

60 pips profit at 1.5020.

At closure we had 2 blue bricks already formed so on the

formation of the 3 brick we have to enter and trade the

reversal.

If Trade 1 was to close at the 3rd blue brick then we won’t

trade the reversal we just let it pass.

Try and observe the difference between the last two figures,

In the first one we are able to enter a sell after trade 1

because the trade closed and we were able to put a pending

order on the third brick.

But in the second figure the trade closed exactly on the 3rd

brick and we were not able to place a pending order before

Trade 1 closure. Rather the next trade will be taken at Trade

2.This rule was created to prevent trading against the trend

sometimes.