Renko is derived from the Japanese word “Renga” or brick ignores time and the movement is based solely on price.
Renko charts filter out minor price movements, making them a preferred choice amongst many traders.
Because some minor price fluctuations are filtered out, trends in price may be easier to spot, and the chart appearance is more uniform compared to candlestick charts.
There are two methods for calculation of bricks:
Like their Japanese cousins (Kagi and Three Line Break), Renko charts filter the noise by focusing exclusively on minimum price changes.
Renko bricks are not added unless the price changes by a specific amount.