The Renko MT5 indicator is a chart indicator that primarily analyzes price movements using Renko bar charts. The real Renko charts are not available on the standard MT5 platform, thus the Renko indicator splits the screen to show the original Renko bar chart on top and the current MT5 platform chart type on the bottom.
Renko charts are a chart type created by the Japanese that focuses on the overall direction of price movement by ignoring the time element. Due to its brick-like appearance, a bar—also known as a “brick”—is formed when the price moves above or below the high or low of the prior bar or candle by a certain amount. Due to the default value of the indicator, which is a 10 pip range, each box on the chart is at the same size in Renko terms.45-degree angles are used to plot these bars. These bars are plotted at 45-degree angles.
This indicator’s settings can be changed to fit the trader’s needs. This includes the price point to use the indicator on (close, open, low, high price, etc.) and the scales. A bar would only form in the event of 10 pip price movements, either down or up. Once the price moves in one direction or the other by at least twice the width of the range, which in this case would be 20 pip, the bar changes color.
These kinds of charts are often traded with other popular indicators such as the RSI and moving averages. Although these charts are cleaner, it goes without saying that they also lack a lot of clarity and dynamism, and another indicator would certainly make up for this. In this situation, traders may utilize the RSI for divergence by comparing the divergence of the chart with the RSI, which provides an additional layer of confirmation.