DEFINITION. Renko charts are a chart type that only measures price movement. The word renko is derived from the Japanese word “renga” which means “bricks”. Not so coincidentally, renko charts are constructed from a series of bricks whose creation is determined by fluctuations in price.
Renko charts are designed to filter out minor price movements to make it easier for traders to focus on important trends. … A Renko chart is then constructed by placing a brick in the next column once the price has surpassed the top or bottom of the previous brick by the box size amount.