Renko Strategy: Reading Trends with "Tetris"

Nickname: Tetris
Profession: Trend Observer (speaks in bricks)
Timeframe: 15 minutes

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1. What Is This Strategy?

Simply put, Renko is a strategy that:

• Uses "brick charts" instead of candlestick charts
• Only looks at price changes, ignores the passage of time
• Enters when the trend changes, exits when the trend ends

Like Tetris 🧱 — stacking brick by brick, green bricks for uptrends, red bricks for downtrends, simple and intuitive!

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2. Core Configuration: "Give the Trend Time, But Don't Get Greedy"

Take-Profit Rules (ROI Table)

Just entered        → Take profit at 10%
Held for 30 min     → Take profit at 5%
Held for 60 min     → Take profit at 2%

Translation:

"I'll give you time for the trend to develop, but the longer it takes, the more anxious I get. At the start I want 10%, after 30 minutes 5% is fine, after another half hour even 2% will do — let's cash out!"

Stop-Loss Rules

Loss ≥ 10% → Cut losses and exit

Translation:

"If I lose 10%, I admit defeat. No more nonsense."

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3. Renko Brick Charts: Turning Candlesticks into "Building Blocks"

3.1 What Is a Renko Chart?

Regular candlestick chart: One candle per time period, regardless of whether price changed.

Renko chart: Only draw a brick when price moves enough.

Uptrend (Green Bricks):
┌─────┐
│ 🟢 │  Price increased by more than 1 brick
├─────┤
│ 🟢 │  
├─────┤
│ 🟢 │
└─────┘

Downtrend (Red Bricks):
┌─────┐
│ 🔴 │  Price decreased by more than 1 brick
├─────┤
│ 🔴 │
└─────┘

In Plain English:

"Candlestick charts look at time — draw one candle every 15 minutes. Renko looks at price — only draw a brick when price moves enough. This filters out those annoying small fluctuations!"

3.2 How Is Brick Size Determined?

Dynamic Calculation: Use the mean of ATR (Average True Range)

brick_size = Average ATR

In Plain English:

"Brick size isn't fixed — it's determined by market volatility. High-volatility coins get bigger bricks, low-volatility coins get smaller bricks. Automatic adaptation!"

3.3 Trend Reversal Rules: Need 2 Bricks to Confirm

This is the smartest part of Renko:

Current Trend	Reversal Condition	Description
Upward (Green Bricks)	Decline of 2 bricks	Only then confirms downtrend
Downward (Red Bricks)	Increase of 2 bricks	Only then confirms uptrend

In Plain English:

"When the trend changes, one brick isn't enough — need 2 consecutive bricks in the opposite direction to confirm. This way you won't get fooled by false breakouts!"

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4. Buy Conditions: 2 Situations to Enter

The strategy has 2 buy signals, which basically means:

🎯 Signal #1: Upward Trend Reversal

Previous brick was red (downtrend) → Current is green (uptrend)

In Plain English:

"The trend was going down before, now it's turning up. Reversal confirmed, get in!"

🎯 Signal #2: Trend Continuation

Previous brick was green (uptrend) → Current is still green (uptrend)

In Plain English:

"The trend is still going up, keep holding or add to your position!"

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5. Sell Logic: Run When the Trend Ends

5.1 Trend Reversal Sell

Current trend turns red (downtrend) → Sell

In Plain English:

"Green bricks turned to red bricks, trend reversed downward, run!"

5.2 Tiered Take-Profit: More Anxious as Time Passes

Holding Time	Take-Profit Threshold	Mindset
Just entered	10%	"Let the bullets fly for a while"
After 30 min	5%	"About time, right?"
After 60 min	2%	"Let's go already, don't dawdle"

In Plain English:

"When I first enter, my expectations are high — I want 10%. But the longer it takes, the more anxious I get. I'll give you 60 minutes, even 2% is fine, let's cash out!"

5.3 Profit Protection Mechanism

sell_profit_only = True  # Only respond to sell signals when profitable

In Plain English:

"Don't rush to sell when losing — wait until we break even first. Only start considering take-profit when we're in profit."

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6. This Strategy's "Personality Traits"

✅ Strengths (Praise Session)

1. Intuitive and Clear: Brick colors show trend direction, even a dummy can understand
2. Filters Noise: Small fluctuations don't create bricks, much cleaner
3. Strict Reversal Confirmation: Needs 2 bricks to confirm, hard to fool
4. Self-Adaptive: Brick size automatically adjusts with market volatility

⚠️ Weaknesses (Complaint Session)

1. Ignores Time: May react slowly in fast-moving markets
2. Sucks in Low Volatility: Too many bricks in quiet markets, signals flying everywhere
3. Complex Calculation: Converting raw data to Renko data is brain-intensive
4. Data Structure Changed: Output isn't original candlesticks, watch out during backtesting

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7. Applicable Scenarios: When to Use It?

Market Environment	Recommended Action	Reason
Clear Trend	🚀 Go heavy	Renko is excellent at capturing trends
Ranging/Sideways	🛌 Lie flat and wait	Bricks change color frequently, many false signals
High Volatility Jumping	🤔 Be cautious	Brick size may not keep up with changes
One-Way Big Rise/Fall	✅ Perfect	Clear trend direction, Renko shines

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8. Summary: How Is This Strategy Really?

One-Sentence Review

"Using Tetris to read trends — simple and intuitive, but ranging markets will kill you."

Who Should Use It?

• ✅ Those who like trend trading
• ✅ Those who hate candlestick chart noise
• ✅ Suitable for manual trading too
• ✅ Those who can accept tiered take-profit

Who Should NOT Use It?

• ❌ Those wanting to make money in ranging markets
• ❌ Those pursuing extreme entry/exit precision
• ❌ Low-volatility coin lovers
• ❌ Those who don't want to learn new chart types

My Recommendations

1. Learn to read Renko charts first: It's a unique chart type that needs adaptation
2. Suitable for trending markets: Use cautiously in ranging markets
3. Can combine with candlestick charts: Using both together works better
4. Manual trading works too: Unlike other strategies that are quant-only

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9. In What Markets Can This Strategy Make Money?

9.1 Core Logic: Using Bricks to See Trends Clearly

Renko is a typical trend-following strategy. Its profit philosophy:

"I don't care how long the rise or fall lasts — I only care if the trend changed. Green bricks = long, red bricks = run!"

• Filter Noise: Small fluctuations don't draw bricks, cleaner
• Clear Trend: Brick colors show direction at a glance
• Strict Reversal Confirmation: 2 bricks to confirm, hard to fool

9.2 Performance in Different Markets (Plain English Version)

Market Type	Performance Rating	Plain English Explanation
📈 Clear Trend	⭐⭐⭐⭐⭐	Bricks stay the same color, just follow along
🔄 Ranging/Sideways	⭐⭐☆☆☆	Bricks keep changing color, slaps both ways
📉 Downtrend	⭐⭐⭐⭐☆	Red bricks appear and you run — don't get hurt
⚡️ High Volatility	⭐⭐⭐☆☆	Brick size changes with it, can get messy

One-Sentence Summary: Like a fish in water during clear trends, gets slapped around in ranging markets.

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10. Want to Run This Strategy? Check These Configs First

10.1 Key Parameters

Parameter	Default Value	Comment
ATR Period	5	Used to calculate brick size, don't mess with it
Timeframe	15m	Standard, can try 1h
Stop-Loss	10%	Gives enough breathing room

10.2 Key Settings in Config File

# Take-Profit (Tiered)
minimal_roi:
  "0": 0.10    # Just entered: 10%
  "30": 0.05   # After 30 min: 5%
  "60": 0.02   # After 60 min: 2%

# Stop-Loss
stoploss: -0.10

# Timeframe
timeframe: 15m

# Sell Signal Settings
use_sell_signal: True
sell_profit_only: True
ignore_roi_if_buy_signal: True  # Keep holding if buy signal present

10.3 Hardware Requirements

Number of Trading Pairs	Minimum RAM	Recommended RAM	Experience
Below 10	2 GB	4 GB	Smooth
10-50	4 GB	8 GB	Okay
Above 50	8 GB	16 GB	Stable

10.4 Backtesting vs Live Trading

Backtesting Notes:

• Strategy outputs Renko dataframe, not original candlesticks
• Be aware of data structure changes

Live Trading Notes:

• Renko bricks are calculated in real-time
• ATR changes, so brick size changes too

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11. Easter Egg: Renko History and Fun Facts

11.1 Name Origin

"Renko" comes from Japanese "練行足" (renko-ashi), meaning "brick chart".

In Plain English:

"The Japanese invented this thing, so they call it Renko. You can call it 'brick chart' if you want — nobody will stop you."

11.2 Why 2 Bricks for Reversal?

Because 1 brick might be a false breakout, 2 bricks confirm the reversal.

In Plain English:

"Like when your girlfriend says 'break up' — the first time might be anger, the second time it's real."

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12. Last But Not Least

One-Sentence Review

"Reading trends with brick charts — simple and intuitive, use cautiously in ranging markets."

Who Should Use It?

• ✅ Those who like trend trading
• ✅ Those who hate candlestick noise
• ✅ Manual traders who want to use it
• ✅ Those who can accept tiered take-profit

Who Should NOT Use It?

• ❌ Those wanting to make money in ranging markets
• ❌ Those pursuing extreme precision
• ❌ Low-volatility coins
• ❌ Those who don't want to learn new things

Manual Trader Recommendations

Highly recommend manual traders learn Renko charts:

• Brick colors are crystal clear
• Entry/exit signals are explicit
• Can be used together with candlestick charts
• Filters noise, steadier mindset

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13. ⚠️ Risk Reminder Again (Must Read This Section)

Backtesting Looks Great, Be Cautious in Live Trading

Renko strategy performs well in clear trends, but ranging markets are its nightmare:

Bricks change color frequently, slaps both ways, fees eat profits.

Hidden Risks of Complex Strategies

In live trading, watch out for:

• Data transformation issues: Outputs Renko data, not original data
• Brick size changes: ATR changes, brick size changes too
• False signals in ranging markets: Bricks keep changing during sideways movement

My Recommendations (Honest Truth)

1. Test in ranging markets first — see if it can handle it
2. Only use on coins with clear trends
3. Manual trading works too — don't just think quant
4. Combine with candlestick charts — works better

Remember: Renko is a tool to see trends clearly, not a guarantee of profit. It's a godsend in clear trends, a pit in ranging markets!

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Final Reminder: No matter how good the strategy, the market won't say hello before teaching you a lesson. Light positions for testing — staying alive is most important! 🙏

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