Median Renko Bars – What They Are & How to Trade with Them

Median Renko Bars – What They Are & How to Trade with Them

What Are Median Renko Bars?

Median Renko Bars are a variation of traditional Renko charts that incorporate a median price calculation to reduce lag and provide a more accurate trend representation. Unlike standard Renko bars, which rely only on price movement, Median Renko Bars use both price action and a median value to create smoother price trends.

How Median Renko Bars Are Calculated

• Brick Size: Set as a fixed value (e.g., 10 pips).
• Median Calculation: Each new brick forms based on the median price of the previous Renko bar, rather than just closing price action.
• Trend Continuation: A new bar forms only when price moves the defined brick size in one direction.

Key Features of Median Renko Bars

• Filter out small price fluctuations for clearer trend analysis.
• Provide smoother trend transitions compared to traditional Renko charts.
• Reduce false signals by incorporating median price calculation.

How to Use Median Renko Bars in Forex Trading

1. Trend-Following Strategy

Median Renko Bars help traders identify and follow trends:

• Buy when: Green Renko bars form continuously in an uptrend.
• Sell when: Red Renko bars form consistently in a downtrend.

2. Breakout Trading Strategy

Median Renko Bars confirm breakouts and trend continuation:

• Buy when: Price breaks above a recent consolidation zone and green bars form.
• Sell when: Price drops below a support level with red bars forming.

Confirmation indicators: Volume increase, moving average crossover, RSI overbought/oversold levels.

3. Support & Resistance Strategy

Median Renko Bars highlight strong support and resistance zones:

• Buy when: Price touches a demand zone and green bars appear.
• Sell when: Price reaches a supply zone and red bars form.

4. Median Renko Bars with Moving Averages

Pairing Median Renko Bars with a moving average (e.g., 50 EMA) improves trade accuracy:

• Buy when: Price stays above the 50 EMA and green bars continue forming.
• Sell when: Price remains below the 50 EMA and red bars dominate.

Pros and Cons of Using Median Renko Bars

✅ Pros:

• Filters out market noise for clearer trend direction.
• Helps traders identify high-probability trend continuations.
• Works well in combination with other technical indicators.

❌ Cons:

• Requires careful selection of brick size for optimal performance.
• Can lag behind real-time price action due to the smoothing effect.

Final Thoughts

Median Renko Bars are a valuable tool for trend analysis, breakout confirmation, and trade execution. When combined with moving averages, support & resistance levels, or momentum indicators, they enhance trade accuracy and risk management.