Candlestick chart and Renko are two popular ways of tracking price dynamics in financial markets. However, they differ greatly in their approach to displaying data.
Candlesticks reflect price changes at fixed time intervals, while Renko is time-independent and focuses only on price movements.
Which type of chart works more effectively in trading? For that, you need to look at their differences in detail.
Differences between Candle and Renko
The main difference between candlestick charts and Renko charts is the method of displaying price movements.
- Candlestick charts are based on fixed time, where each candlestick reflects the price dynamics for a certain period.
- Renko charts are timeless charts that completely ignore time and focus solely on price changes.
A new brick appears only when the price passes a set distance, for example, 25 pips. Brick size calculation can be customized by the trader.
Using ATR with Renko
Over time, more traders have started to use ATR (Average True Range) to build Renko bricks. The ATR indicator calculates the Average True Range based on the previous 25 candles (modifiable) and determines new brick sizes.
Advantages of ATR in Renko:
- It adapts to changing market conditions automatically.
- Traders can switch between assets without determining the best chart size manually.
- Asset analysis becomes much easier.
Renko vs Candlesticks: Key Characteristics
Candlestick Chart:
- Each candle shows the opening, closing, high, and low prices for a specific time interval.
- They display trading volume, making them useful for analyzing short-term volatility and market activity.
- The colors of the candles help visually analyze the market: green color — uptrend, and red color — downtrend.
- Different sizes and combinations of candles provide more accurate signals for short-term trading.
Renko Chart:
- They ignore the time factor, showing only significant price changes, which makes them timeless graphics.
- They use fixed-size bricks, which simplify trend analysis by removing unnecessary “noise”.
What Makes Renko Better Than Candlesticks?
Renko Advantages:
- Eliminates market noise and focuses on long-term price movements.
- For example, in a volatile market, a sequence of green bricks indicates sustained growth.
- Allows traders to focus on significant price movements while ignoring timeframes.
- Graphical analysis is visually clearer:
- Support and resistance levels, trendlines, and chart patterns (like double tops) are spotted faster and more accurately.
How to Trade Using Renko
For short-term trading, the Renko chart is not the best option. Therefore, day trading strategies will work with varying success. Despite many articles on this topic, nothing beats the good old candlesticks for intraday trading.
However, for medium- and long-term traders, Renko can be a valuable tool.
As described above, the Renko chart smooths out market noise by ignoring insignificant price movements. In this case, the trader needs much less time to identify the overall trend. A sequence of green bricks indicates steady growth, while a sequence of red bricks signals a decline.

This example highlights how Renko charts simplify the visualization of global BTC trends over time.
As with the candlestick chart, Renko charts should be used alongside other technical analysis tools.
Combination with Support and Resistance Levels

Renko charts make it easier to identify key support and resistance levels, which helps to determine entry and exit points more accurately.
As soon as the price reaches the support level and the sequence of red color bricks is replaced by the first green color brick, it is a signal of a rebound. At such moments you can open a long position. The stop-loss order will be below the support level.
Renko and Patterns
The main advantage of Renko is less market noise. Finding chart patterns becomes much easier. Head and Shoulders, various triangles, flags, pennants, double top/bottom, and other well-known patterns can be detected faster.

The rules for entering a position are the same as those used with candlestick charts. For more detailed information you can read our article about top chart patterns.
Renko and Indicators
Technical indicators also work well on the Renko chart. They give trading signals significantly rarer, but they are more accurate and the percentage of winrate is higher.
Moving Average
For example, the 50 MA on the daily chart of AAPL perfectly shows both short-term and long-term trading opportunities.

For a short-term trader, there was an opportunity to open a short position when the price touched the 50 MA from the bottom to the top, but did not break through it. A short was opened from this level, and a stop loss was placed above the 50 MA.
The same thing happened later, but in the opposite direction. After testing the level of 50 MA and fixing above (and this holding above the indicator and the subsequent change in the color of the brick), it was necessary to open a long position with a stop below the 50 MA.
Bollinger Bands
Bollinger Bands, unlike MAs, give signals much more often. BB shows trend reversal cleaner than on a candlestick chart.

Short-term traders can open positions when the upper/lower bands are touched or broken. For short-term traders, the ideal target is the middle band. For medium-term traders:
- The lower band (if a short position is opened)
- The upper band (if a long position is opened)
Stop loss orders should be placed outside the Bollinger Bands.
Oscillators
RSI, Stochastic and other oscillators indicate if the market is overbought or oversold. In other words, they give absolutely the same signals as in the interaction with the candlestick chart. There are no special differences here.
Advantages and Disadvantages of the Renko Chart
Advantages:
- Trend detection is much easier compared to other types of charts.
- Removes market noise, making it faster to detect trading signals from patterns and indicators.
- Ideal for medium- and long-term traders.
Disadvantages:
- Delay in the formation of new bricks, especially during low volatility.
- Not suitable for high-frequency trading or scalping.
- Dependence on the correct brick size setting. This can be simplified by using the Average True Range (ATR).
Conclusion
The main question of this article: so, what to choose — Renko or Candle? The answer to this question is subjective and depends on the trader. Technical analysis exists to simplify trading.
Many traders combine candlestick charts with Renko.
Traders often use Renko charts for identifying global trends, while relying on candlestick charts for precise entry points.
In any case, Renko charts provide traders with a powerful method for market analysis by focusing on significant price changes. They help avoid premature signals associated with time intervals and allow traders to focus on clearly displayed trends and reversal points.
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