Renko Flo Bars
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The Four Components of Renko FloBars(RJay’s Renko Spectrum Bars) READ MORE HERE
We call this our Trade Chart. The Renko FloBar chart is only concerned with price movement; time and volume are not included in calculating these bars. The Renko FloBars reveal to both the day-trader and position trader, the necessary visual of the market’s organic energy structure. Buy or sell responses’ becomes a clear green or red visual for the trading mentality.
We recommend purchasing RJay’s Renko exceptional Spectrum bars. READ MORE HERE
We combine Heiken Ashi smoothing with this bar type and refer to this combination as Renko FloBars.
The green and red brick colors indicate whether the bulls or bears have control. The strong resistance combination of both the upper yellow wrap and upper magenta energy bands prove to be where the seller’s finally gain control with a brick color change to red.
The brick placement is also another vital key in reading market energy. The location of the bricks when associated with the combination of both the upper yellow and upper magenta bands will help determine whether the upper yellow is becoming strong resistance.
In the above chart you will notice that the green bar price action had difficulty moving higher into the upper yellow band. The bulls had been with the up energy and were beginning to lose control, as seen by FloBars inability to place green bricks in the upper yellow band.
The FloBars provide a simple strength gauge of price momentum. The trader will have a visual alert to a loss of momentum up when brick bodies begin moving horizontally. (i.e. brick tops)
In the above chart you will notice that the tops of two green bricks begin to move sideways at about the same price level (in three places). This is an indication that the momentum up is ending and sellers are beginning to enter the market.
The FloBars also reveal times when bricks may have a wick on both sides, indicating a two sided market (bulls and bears are in response – but no one is in control) This can be useful as the trader can be placed on alert and remain patient for the brick color change.
Previously we discussed brick momentum where we had the tops of two green bricks moving horizontally (in three places). Then you will notice that some of the bars had wicks on both sides of their bricks, indicating that a two sided market was underway and to be alert for a possible sell opportunity. The red brick that came soon thereafter confirmed that sellers were indeed accumulating shorts.
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