Renko Buy and Sell Signals: Patterns and Examples

Updated December 2025. Renko buy and sell signals are trade cues that appear when bricks break key swing levels or a pattern confirms a reversal. Because Renko is price-based (not time-based), these signals can be easier to see and test than on candlesticks.

This page is a rule-based playbook you can follow in order: choose brick size, define trend bias, wait for a break, require a confirm brick, place a logical stop, then manage the trade with a simple trailing rule.

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What is a Renko chart?

Renko charts are price-only charts that draw a new brick only after price moves a set amount. This filters small fluctuations and makes swing structure and trend direction easier to see.

• Candlesticks: show every time interval, including a lot of noise.
• Renko: prints a new brick only when price moves enough to matter.

If you want the beginner overview first, start here: Renko charts beginner guide.

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Brick size choices

Brick size is the most important setting because it controls how often signals appear. Bricks that are too small create too many flips. Bricks that are too large can hide early structure.

Method	What it does	Best for	Tradeoff
Fixed brick size	Same brick size all the time	Learning, consistent visual structure	Does not adjust when volatility changes
ATR-based brick size	Brick size adapts to recent volatility	Staying aligned as markets speed up or slow down	Signals can change when volatility shifts

Use this as your brick-size foundation: ATR-based Renko brick size strategy. If you prefer a video format, use: Traditional vs ATR Renko.

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Cheat sheet: Renko buy and sell signals

Aspect	Buy (bullish)	Sell (bearish)
Trend bias	Higher highs and higher lows	Lower highs and lower lows
Trigger	Brick closes above prior swing high	Brick closes below prior swing low
Confirm	One confirm brick, or W confirm	One confirm brick, or M confirm
Stop	1 to 2 bricks below the invalidation swing	1 to 2 bricks above the invalidation swing
Manage	Trail below swing lows or trail 1 to 2 bricks	Trail above swing highs or trail 1 to 2 bricks

Optional indicator confirmation is fine, but keep it simple. If you want a structured approach: best Renko indicators (with rules).

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Buy signals: full rules

1. Define bias: confirm the market is making higher highs and higher lows.
2. Mark the swing high: identify the most recent clear swing high (structure level).
3. Trigger: a bullish brick closes above that swing high.
4. Confirm: wait for one more bullish brick to close beyond the level, or a W confirm if you are trading reversals.
5. Stop: 1 to 2 bricks below the invalidation swing low.
6. Manage: trail below new swing lows, or trail by 1 to 2 bricks once the move starts running.

Exits matter as much as entries. If you want a dedicated exit framework, use: 5 Renko exit rules every trader should know.

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Sell signals: full rules

1. Define bias: confirm the market is making lower highs and lower lows.
2. Mark the swing low: identify the most recent clear swing low (structure level).
3. Trigger: a bearish brick closes below that swing low.
4. Confirm: wait for one more bearish brick to close beyond the level, or an M confirm if you are trading reversals.
5. Stop: 1 to 2 bricks above the invalidation swing high.
6. Manage: trail above new swing highs, or trail by 1 to 2 bricks on strong drops.

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Pattern confirmations: W, M, head and shoulders

Patterns are not magic. They are a structured way to avoid taking every small color flip. Use them as a second “yes.”

• W pattern (bullish): two swing lows, then the breakout brick closes above the middle swing high. Require a confirm brick above the breakout.
• M pattern (bearish): mirror of W. Two swing highs, then the breakdown brick closes below the middle swing low. Require a confirm brick below the breakdown.
• Head and shoulders: neckline break plus confirm brick. Stop goes beyond the right shoulder (in bricks).

If you want a focused pattern guide, use: Renko patterns cheat-sheet and W pattern trading strategy.

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Risk and trade management

• Size your trade using bricks: if your stop is 2 bricks away, define that as your 1R risk and size accordingly.
• Trail using structure: last swing is usually cleaner than a fixed “take profit.”
• Stand aside in ranges: most Renko losses come from range-chop, not from trends.

If you want to see how I apply Renko signals in long-term decisions, see: Renko investing strategy.

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How to avoid whipsaws

Whipsaws usually happen when you trade every color change instead of waiting for structure to break. These three filters do most of the work:

• Structure filter: only trade after a swing break, not a single opposite brick.
• Confirm-brick filter: require one extra brick beyond the level before entry.
• Trend filter: if the higher time frame is up, prioritize buys and be stricter with sells (and vice versa).

Trendlines help a lot here. If you want a clean indicator companion that is easy to test, see: Renko indicators with playbooks.

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FAQs

What are Renko chart buy and sell signals?

They are trade cues that appear when Renko bricks break key swing levels or confirm a reversal pattern. A common buy is a close above a prior swing high. A common sell is a close below a prior swing low.

Do I need indicators to confirm Renko signals?

No. You can trade using price structure alone. If you add indicators, keep it to one tool that has a clear purpose, such as Supertrend for trend bias or MACD for momentum confirmation.

Why do Renko charts chop in ranges?

In tight ranges, bricks flip direction frequently and create false triggers. The fix is to trade only after a swing break and require a confirm brick beyond the level.

How do I place stops on Renko trades?

Place stops 1 to 2 bricks beyond the invalidation swing. This keeps risk tied to the same structure that created the signal.

Education only, not financial advice. Test any approach on your own instruments, brick sizes, and timeframes.