Riding the waves with Renko Swing Trader

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Riding The Waves With Renko Swing Trader

Last week was brutal for anyone expecting a straight move. Markets began on a down note, rebounded sharply and then got hammered back lower. By the time the dust settled, the Dow Jones Industrial Average had moved at least 1 percent each of the five sessions. Rough going for buy-and-hold investors…

That kind of price action can be rough for investors, but it provided a profitable environment for one of the popular products in our TradingApp Store. Simplemente Dow Jones Renko Swing Trader goes long and short Dow futures (@YM) using a proprietary indicator. The chart below shows some of its bullish and bearish trades from Thursday, April 5:

The first thing that stands out about this product is its use of Renko Bars instead of candlesticks or bars. Renko (similar to the Japanese word for “brick”) charts track price movements by size, drawing a “brick” when the security rises or falls a certain number of points. As a result, the horizontal axis doesn’t show show time intervals.

“It lets you see the trends better,” said creator Thomas Nocito of Simplemente Trading. “They go in a straight line, so it’s good for intraday trend following.”

Even though it uses Renko charts, some traditional analyis tools like moving averages, momentum and volume are baked into Simplemente’s proprietary algorithm. “We have several things built into its that confirm each other before it takes a trade,” Nocito explained.

The product is different from many others in the TradingApp store because it has an object-based approach. That means you back-test using the “Statistics” tab on its dashboard instead of the clicking on Data → Strategy Performance Report, as you would with traditional strategies.

Disclosure: Past performance may not be indicative of future results.

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Risk Disclosure: Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.

Hypothetical Performance Disclosure: Hypothetical performance results have many inherent limitations, some of which are described below. no representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. for example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all which can adversely affect trading results.