A Two-Brick Renko Trend-Following Strategy

Summary

The document describes a continuously invested Renko strategy that changes direction after two consecutive bricks point the other way. It uses stop orders at the next Renko thresholds to enter long or short, with the brick size defining price movement rather than a chart’s time interval. The approach is presented as a simple way to follow trends.

The author reports a tick-by-tick backtest on the DAX using H1 data, 40-point bricks, and a one-point spread. The reported pattern is a low win rate offset by some large winning trades; no detailed performance statistics or comparison are provided. The author suggests testing refinements such as entry filters, breakeven rules, and trend filters, and exploring other brick sizes and forex markets. Results are specific to the stated test and do not establish future profitability.

Key ideas

• The strategy enters long after two bullish Renko bricks and short after two bearish bricks.
• Stop orders at the next Renko levels keep the strategy exposed to the market.
• The described DAX backtest used 40-point bricks and a one-point spread.
• The author reports a low win rate balanced by some large gains.
• Entry rules, breakeven logic, trend filters, and other markets are proposed for further study.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.