Why Renko Charts Work Well for Low-Liquidity Markets
On a standard candlestick chart, each candle corresponds to a specific time interval. Renko uses a different principle — a new element appears only after the price changes by a pre-set amount. This determines the size of the block, or “brick,” which serves as the basic unit of such a chart. If the move is smaller than the specified value, no new block is formed.
All bricks are the same size and show the direction of price movement. Up bricks form when the price rises, and down bricks form when it falls. A sequence of bricks in the same direction helps visually highlight a sustained move, while a change in direction may indicate a correction or a potential reversal.

The name Renko comes from the Japanese word renga, which translates as “brick.” It reflects the very principle of building the chart from a sequence of identical price blocks.
One of Renko’s key features is that each brick is not tied to a fixed time interval. It appears only after the price moves by a specified amount. At the same time, on TradingView, Renko’s historical construction depends on the timeframe of the source data — the platform uses closing prices or the OHLC of the corresponding periods. The shorter the selected interval, the more price data is taken into account when building the chart.
In low-liquidity markets, individual trades can noticeably affect quotes, and the spread between bid and ask prices often widens. Renko filters out some minor moves and makes the overall structure of price changes more visible.
However, this approach has limitations. TradingView warns that Renko levels are calculated synthetically and may not match actual market prices at a specific moment. That is why these charts are primarily suited for visual analysis. Backtesting trading strategies directly on historical Renko values can produce results that would be impossible to achieve with real trade execution.








