I have to admit that at age 57 I am a bit of an old timer when it comes to price action trading. If you can imagine this, computers were in their infancy when I began my quest to learn to trade on Wall Street. Yes, we had some rudimentary computers but they weren’t much help; we often charted by hand and passed that information on to the senior trader for his interpretation. There were no candlesticks back in those days, they were relatively unknown; of course now, you rarely see a bar chart or a point and figure chart in actual trading. By the way, an exploration of these trading tools will greatly enhance your trading ability by giving you a different look at price action in price movement. Practice learning to trade e-mini’s with these systems just to familiarize yourself with a different viewpoint on e-mini trading.

But there are still those nasty old candlesticks…

Yes, I own several books concerning Japanese candlestick trading, but I have found, along with a legion of scientific research, that Japanese candlestick trading is an “iffy” proposition at best. The data simply does not back up the claims of proponents of Japanese candlestick trading as an effective trading system.

What you do get with candlesticks is a great deal of noise and distorted candles that are sorted in either 3 minute, 5 minute, or 15 minute (or whatever time period you choose) increments in the market tends to get analyzed in those time frames. But let me ask you this; what the heck does time have to do with trading? No one has been able to answer that question satisfactorily for me. Granted, there are certain times of the day when the market is more active, but this is a function of exchange practices and trading behavior.

On the other hand, I trade “Better Renko” bars with great success because they allow me to focus on pure price action. There is no time limit when dealing with Renko bars. The price moves and price range intra-bar give real insight into what the market is doing. I do not get this detailed price action with candlestick bars. Range bars are often a good choice in congested markets as they show pure price action too.

I realize that I am in the minority in this view of Renko bars, but when I start new traders using “Better Renko” bars they have enjoyed success where candlesticks were both confusing and difficult to interpret. Get the market background noise out of your trading by using Renko or range bars.

There are a wide variety of Renko bars on the market today as developers have attempted to improve the natural price action display of traditional Renko bars. I prefer to use the “Better Renko” bars at a setting of 4 ticks. Price action is everything, and will consistently outperform any mechanical system on the market. You need only look at Wall Street and compare the performance of traders in that arena to understand this.

My suggestion is that you try Renko bars, specifically “Better Renko” bars and see if your trading does not improve. Granted, candlesticks have their time and place but I do not subscribe to the idea of Japanese candlestick patterns and the research supports my thesis. In short, I can see and recognize specific trading patterns with great clarity when using Renko bars; this is not the case with candlestick bars. Read up on Renko bars and learn the advantages and disadvantages of using these price action superstars, you might find you put more money in your pocket without all the market noise to distract you.