Down Bricks - Bricks that form below the previous brick.Up Bricks - Bricks that form above the previous brick.
There are four different brick types, generated by a renko chart: There can never be more than one brick in any one vertical column.Bricks will always have their corners touching.There are two rules regarding brick placement:
If price closes above $56, for example $57 the new brick must still stop at $56. The new brick won’t be formed until prices close either at or above $56 or at or below $50. For example, let’s say the brick size is set to 2 points and the last brick covers prices of $52 to $54. Prices may exceed the values of the previous brick (either above or below), however a new brick will not be formed until the price movement is large enough. It is important to note that new bricks are only added when price movements completely fill the predetermined brick size. Once the price moves more than the user-defined brick size, either above or below the most recent brick, a new brick is added to the chart. First, the size of the bricks is pre-determined by the user.
The concept of renko bars is very straightforward. The word, renko, is derived from the Japanese word, renga, which means " brick." Not so coincidentally, renko charts are constructed from a series of bricks (or Bars), whose creation is determined by fluctuations in price. Renko charts are a chart type that only measure price movement.
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