Renko Charts Explained: Brick Size, Scalping and MT5 Testing

What is a Renko chart?

Renko is a price-based way of organizing a market’s movement into bricks. A standard five-minute candle represents a fixed time interval; a Renko brick represents a configured price movement. A quiet market may produce no completed brick for a long time, while a fast move can produce several almost immediately. The horizontal sequence therefore answers “which brick came next?” rather than “how many minutes passed?”

Think of Renko as a filter applied to a price path. You choose a threshold, then the chart records movement that satisfies its construction rules. Price fluctuations below that threshold can remain invisible in the completed bodies. Filtering can simplify analysis, but the underlying market still experiences those fluctuations, and open positions still gain or lose money while a new brick is forming.

The term “Renko candles” is common, although “bricks” is more precise. Their shapes can resemble candle bodies, and some generators show wicks. A wick represents additional movement recorded under that generator’s rules; a completed body summarizes the threshold movement. Before interpreting a pattern, establish which price input, anchor, reversal convention and wick policy produced it.

How are Renko bricks drawn?

Here is our own worked example using classic fixed-size, non-overlapping Renko. Set brick size B to 2 price units. Suppose the previous upward brick opens at 102 and closes at 104. The next upward brick completes when the input reaches 106. A move from 104 to 105.7 has not reached that continuation threshold, even though an ordinary time candle would already show the movement.

Now imagine sequential input prices of 104, 104.8, 103.2, 105.2, 104.5, 105.7 and 106. There is no completed continuation brick until the final observation. At 106, the new brick’s body covers 104 to 106. This is a construction example, not an entry signal. A trading strategy needs separate rules for entries, exits, sizing and execution.

A sufficiently large incoming move can complete several bricks. With the same last close of 104 and B = 2, an input at 110 could require continuation bricks closing at 106, 108 and 110. A robust generator must process every threshold crossed under its specified rules. Those intermediate synthetic levels do not prove that three separate executable market quotes were available at those prices.

Why does classic Renko need a two-brick reversal?

In the convention used here, the first opposite brick must avoid overlapping the previous body. After an upward brick from 104 to 106, a downward move to 104 is only one brick size below the last close. The first completed downward body instead runs from 104 to 102, requiring a move of 2B from 106. Further downward bricks can continue in one-B increments: the next body runs from 102 to 100.

Reversing upward follows the same logic. After a downward brick from 102 to 100, the first upward body runs from 102 to 104. Price must reach 104, a two-B move from the previous close. The first opposite brick is still only B high; the required market movement from the last close is larger.

Do not assume every tool uses this convention. Modified, overlapping or custom Renko implementations can use different reversal distances and open-price offsets. Even a familiar-looking chart can follow different mathematics. Save the generator version and its construction settings with every test so that a result can be reproduced.

Renko versus regular candlesticks: what changes?

The following original illustration uses one hypothetical price path. The upper view samples equal time steps. The lower view rebuilds the same sequence into two-unit Renko bricks. Both describe the input, but each emphasizes different information. The Renko view makes runs of threshold movement easy to count while discarding equal-time spacing.

An indicator’s lookback changes meaning too. A moving average over 50 Renko bricks uses 50 generated observations, not 50 minutes. Those bricks might form during a short burst or across several sessions. A Stochastic period on Renko is likewise a brick-based window. Keep time-based context separately when a strategy depends on sessions, news, overnight exposure or how long a position has remained open.

What are the benefits and limitations of Renko?

Its practical appeal is consistent price increments. Rules such as “exit after two opposite completed bricks” or “require five bricks between pivots” are straightforward to describe and audit. Filtering small movements can make sustained direction, consolidation and pullbacks easier to inspect. That can improve the clarity of a research process; it is not evidence that the next trade has better odds.

The cost of filtering is information loss and delay. An opposite brick appears only after enough movement has occurred. A smoother historical chart may therefore imply later signals. In a sideways market, alternating bricks can repeatedly trigger losses. Increasing B can reduce visible alternation but can also increase signal distance and reduce opportunities. None of these trade-offs disappears because the chart looks tidy.

Do not infer executable prices from brick bodies. TradingView explicitly warns that Renko prices are synthetic and can make chart-price backtests inaccurate. Its historical construction uses the selected interval’s closes or OHLC rather than a complete tick path, and its live projection bricks are not final history. These are platform-specific reasons to distinguish a visual representation from a realistic execution test. ^[1]

Can Renko be used on every market and chart?

Conceptually, a numerical price stream can be transformed into threshold-based bricks. Forex, indices, commodities and other instruments can therefore be research candidates when appropriate data and software are available. That does not imply every platform supplies a Renko chart, every broker offers the instrument, or one configuration suits every market.

Check price precision, minimum tick, sessions, liquidity and contract specifications. Sparse or interrupted quotes can create a misleading impression of smooth movement. Gaps may generate multiple bodies with no intervening tradable prices. A fixed size of “10” means little until you state whether the unit is symbol points, index price units, pips or a monetary amount.

Three ways an MT5 strategy can use Renko

An MT5 tool may draw bricks as an indicator or chart objects, maintain an internal brick sequence inside the Expert Advisor, or use a custom symbol. MetaQuotes documents custom instruments as local instruments that can support testing but cannot directly execute real trades. A live implementation must trade the real broker symbol. The MQL5 book also explains that mapping irregular bricks onto MT5’s time grid creates synchronization limitations. ^{[2] [3]}

An internal generator can keep brick decisions separate from order prices: market ticks update the brick state, a completed brick can trigger strategy logic, and the EA submits its order on the broker symbol. This is an architectural option, not proof that a particular EA implements it correctly. Check the manual, visual behavior and trade log rather than inferring implementation from screenshots.

How to choose a Renko brick size

Start with the intended experiment. Are you testing short holding times, intraday direction or multi-session swings? What is a meaningful movement relative to that market’s typical volatility and trading costs? Choose a small set of plausible sizes before reviewing results, then test neighboring settings and retain independent validation data.

A fixed size gives transparent thresholds: B stays constant under the chosen rules. An ATR-based size links the threshold to a volatility estimate; a percentage-based size links it to a price reference. Their exact behavior depends on the generator. For reproducibility, document when the reference is sampled, whether old history is rebuilt and whether B changes only prospectively. Never apply a future volatility estimate retroactively to earlier decisions.

Do not equate a smaller B with a lower-risk position. Position size and actual stop distance determine intended monetary exposure. Changing B may change where stops sit, how frequently entries occur and how many positions overlap. Review the whole strategy rather than choosing a size because it produces an attractive number of bricks per day.

Renko brick sizes for scalping, intraday and swing research

There is no universal profitable range. The next table is an original, hypothetical experiment for EURUSD under the conventional pip definition of 0.0001. It illustrates how you might organize a research grid; it is not a recommendation to trade EURUSD or use these settings. Whether any setting is practical depends on current costs, volatility, execution and the strategy’s rules.

These categories overlap intentionally: a brick size does not dictate holding time. A five-pip strategy can hold longer than expected in quiet conditions, and a larger brick can complete quickly during a fast move. Record actual elapsed time from signal to exit instead of assuming a strategy is scalping because the chart contains small bricks.

For a five-decimal EURUSD quote with symbol point 0.00001, one conventional pip equals ten points. Thus five pips equals 50 symbol points and B = 0.00050. On a four-decimal quote, five pips equals five points. Verify what the EA input expects. These conversions cannot be copied blindly to gold, indices or crypto contracts.

A volatility-relative research grid avoids inventing a universal index setting. For example, suppose a specified time-based volatility estimate is 40 price units. Testing B at 0.10, 0.25 and 0.50 of that estimate gives 4, 10 and 20 units. The estimate and fractions here are hypothetical. Round valid sizes to the instrument’s minimum tick and fix the reference period and update policy before testing.

Small bricks, trading costs and risk-reward

Our next arithmetic example assumes an all-in round-trip cost equivalent to one pip. That is 50% of a two-pip brick, 20% of five pips, 10% of ten pips, 5% of twenty pips and 2.5% of forty pips. The cost is held constant solely to show the relationship. Actual spreads, commissions and slippage change across brokers, times and order sizes.

A cost-to-brick ratio is not a break-even formula. A strategy’s profits and losses may span several bricks, include partial exits or exceed planned distances during gaps. Measure complete net outcomes. If you compare a spread filter with B, distinguish the instantaneous spread from the full round-trip cost rather than treating them as interchangeable.

Likewise, a target of four bricks and stop of two suggests a planned price-distance ratio of 1:2 only under consistent entry, sizing and execution assumptions. It does not guarantee an average two-R winner or a particular win rate. Read our risk-reward and win-rate guide to connect realized payoff, costs and expectancy.

How to backtest a Renko robot in MT5

Begin with a written construction specification: input price stream, anchor, B units, reversal rule, completed-brick policy, handling of multiple thresholds and reset behavior. Add EA version, broker symbol, sessions, date range, sizing and execution assumptions. These details belong with the report; a chart image alone cannot reproduce the experiment.

For tick-driven logic, examine MT5’s “Every tick based on real ticks” mode and the available broker history. MetaQuotes distinguishes real ticks from generated data and describes fallback generation where necessary history is missing or inconsistent. The chosen label does not remove the need to inspect data coverage and the tester journal. ^[4]

Audit a few signals manually. Record the last completed brick, the threshold-crossing quote, the signal time and the actual simulated order fill. Confirm that the EA did not use an unfinished brick as final or fill at an earlier synthetic threshold after the market had jumped beyond it. Include bid/ask behavior, commission, financing and realistic execution stress.

Then test adjacent B settings instead of selecting an isolated peak. Compare different market regimes and an untouched period, inspect drawdown and trade concentration, and check actual holding time. A preset that excels only at one exact size or on one broker feed deserves further investigation. Use the MT5 backtesting checklist, optimization guide and walk-forward guide for the broader process.

Finally, observe the same configuration on demo with the real broker instrument. Compare the live brick sequence and signal timing with the tester assumptions. Rebuild history using the same available data and settings to investigate discrepancies. Demo testing can reveal implementation and execution differences; it does not establish future profitability or eliminate live-market risk.

For a complete trading-method explanation, read our Renko Divergence strategy guide, covering signals, confirmations, stops and exits.

An example: EA #001 — Renko Divergence

EA #001 — Renko Divergence is our configurable MT5 research example. Its current product documentation describes an internal Fixed Box Renko structure, a two-box reversal convention and regular Stochastic divergence with selectable confirmation modes. It also describes Pure Renko and Fixed RR exit options. These are documented features; consult the product page for verification status, limitations and release readiness.

This article remains general so that future Renko products can link to the same explanation. Do not transfer a preset from one strategy to another merely because both use bricks. Construction rules, entries, stop placement, filters and execution can differ. We build the configurable tool; you choose and validate the market, settings and risk.

Your Renko research checklist

• Identify the exact generator and whether signals use completed bricks.
• Write B in both EA input units and actual price distance.
• Verify continuation, reversal and gap behavior with simple examples.
• Keep session timing and real quote prices alongside the brick sequence.
• Evaluate costs, stop exposure and overlapping positions together.
• Compare neighboring sizes and preserve independent validation data.
• Inspect individual fills, drawdown, actual holding times and demo behavior.

Frequently asked questions about Renko charts

Are Renko charts better than candlestick charts?

They emphasize different information. Renko can make threshold-based rules easier to inspect; time candles retain time structure. Whether a strategy performs better is an empirical question requiring realistic testing after costs.

Does a Renko brick represent a fixed number of minutes?

No. Completion depends on the chosen price threshold and construction rules. Platforms may display synthetic or mapped timestamps, so check actual event times separately.

What is the best Renko brick size for scalping?

There is no universal best size. Compare a limited research grid against instrument volatility, all-in costs, execution, trade count and unseen data. The EURUSD examples above are hypothetical test candidates.

Can Renko repaint?

A provisional brick can change before completion. Rebuilding history with different inputs, anchors or adaptive sizing can also change the chart. Do not treat “Renko never repaints” as a universal statement.

Can I use Renko on any MT5 timeframe?

The host timeframe and brick logic are different settings. An internal EA can build its own sequence from ticks, while other tools depend on a time-based input or custom symbol. Follow the implementation’s documented requirements.

Can I backtest by buying at every green brick close?

Only a properly specified test can assess that rule. A displayed brick close may be synthetic and unavailable for execution when the signal becomes known. Use real-symbol quote timing and realistic simulated fills.