Control Your Trading Emotions by Smoothing the Price Action
Trading emotions can sabotage even the best strategies. Fear and greed drive impulsive decisions. Smoothing the price action helps remove noise. This creates calmer, clearer charts. Emotional control follows naturally.
How Smoothing Works
Use non-time-based charts to smooth price action. Renko or tick charts ignore time. They form bricks or bars only on significant moves. This filters choppy periods. Volume price analysis (VPA) becomes easier—true trends stand out without distractions.
Benefits with Quantum Tools
Quantum’s Renko Optimizer on NinjaTrader finds perfect brick sizes. TickSpeedometer reveals participation surges. Trend Monitor keeps you aligned. Anna Coulling’s VPA approach pairs perfectly—volume confirms smoothed signals for disciplined entries.
Smoothing price action builds emotional resilience. Fewer false signals mean fewer frustrations. Quantum indicators make it simple and effective. Trade with confidence, not emotion. Start smoothing today for calmer, consistent results.
How Renko Charts Work
Choose a brick size based on asset volatility:
- Small bricks (e.g., 5 pips on EUR/USD) for scalping.
- Larger bricks (e.g., 20 pips) for swing trading.
Direction changes require a reversal of 2 bricks by default (to avoid whipsaws). Some platforms allow 1-brick reversals for sensitivity.
Advantages:
- Removes time noise—great in ranging or choppy periods.
- Clear trend identification—long brick runs show strength.
Disadvantages:
- Lags in low-volatility markets (no bricks form).
- Misses some intraday moves if brick size is too large.
Common Renko Chart Strategies
- Trend Following
- Enter long on a series of green bricks.
- Enter short on red bricks.
- Stay in trade until reversal bricks appear.
- Use trailing stops at recent brick lows/highs.
- Reversal Trading
- Watch for 2-brick reversals at support/resistance.
- Confirm with volume price analysis (VPA)—high volume on reversal bricks shows conviction.
- Breakout Strategy
- Trade breaks from consolidation (flat brick periods).
- Enter on new brick in breakout direction.
- Combine with Quantum Renko Optimizer for dynamic brick sizing.
- Multi-Timeframe Approach
- Higher timeframe Renko for trend direction.
- Lower timeframe for entries.
- Align with currency strength indicator for relational confirmation.
- Combining with Other Tools
- Add Trend Monitor for alignment.
- Use TickSpeedometer for participation surges.
- VPA on Renko: High volume bricks validate trends.
Practical Tips
- Platforms: NinjaTrader, MT4/MT5, TradingView (with custom scripts).
- Brick size: ATR-based for adaptive (Quantum Renko Optimizer does this).
- Risk management: Stops at recent swing bricks.
Renko charts excel at trend clarity. They reward patience. Combine with VPA and Quantum tools for high-probability strategies across forex, stocks, or futures. Test on demo first—brick size is key to success.
By Anna Coulling