Renko Brick Size Calculator
Calculate optimal Renko brick size using ATR for noise-free trend following charts. Enter values for instant results with step-by-step formulas.
Calculator
Adjust values & calculateBrick Size Comparisons
Simulated Bricks (Last 8)
Formula
Where ATR(n) is the Average True Range over n periods (typically 14), and the Multiplier (typically 1.0) scales the brick size. A new Renko brick is drawn only when price moves by the full brick size in one direction, filtering out noise and creating clear trend patterns.
Last reviewed: December 2025
Worked Examples
Example 1: ATR-Based Renko Brick Size
Example 2: Next Brick Price Levels
Background & Theory
The Renko Brick Size Calculator applies the following established principles and formulas. Foreign exchange markets facilitate the conversion of one currency into another and serve as the largest and most liquid financial markets in the world, with daily turnover exceeding seven trillion US dollars. Exchange rates are quoted as currency pairs, expressing the price of one unit of a base currency in terms of a quote currency. For example, a EUR/USD rate of 1.0850 means one euro buys 1.0850 US dollars. The smallest standardized price movement in most pairs is the pip, typically the fourth decimal place, with a value of 0.0001 per unit for USD-denominated pairs. The bid price is the rate at which a dealer will buy the base currency, while the ask price is the rate at which it will sell. The spread between bid and ask represents the dealer's compensation and varies with liquidity and volatility. Leverage amplifies both gains and losses by allowing traders to control positions larger than their deposited margin. A 100:1 leverage ratio means a one-percent adverse move eliminates the entire margin, making position sizing and risk management critical. Two parity conditions from international economics anchor exchange rate theory. Purchasing Power Parity (PPP) holds that exchange rates should adjust over time so that identical goods trade at equivalent prices across countries: S = P_d / P_f, where S is the spot rate and P_d and P_f are domestic and foreign price levels. PPP performs well over long horizons but poorly in the short run due to trade barriers, non-tradable goods, and capital flows. Covered Interest Rate Parity (CIRP) is a near-arbitrage condition stating that forward exchange rate premiums or discounts exactly offset interest rate differentials between two currencies: F/S = (1 + r_d) / (1 + r_f). Deviations from CIRP create riskless arbitrage opportunities that traders rapidly eliminate. Uncovered Interest Rate Parity posits that high-yielding currencies should depreciate to offset their interest advantage, though empirical evidence is mixed and the carry trade — borrowing in low-rate currencies to invest in high-rate ones — has generated persistent returns.
History
The history behind the Renko Brick Size Calculator traces back through the following developments. For much of the nineteenth century and early twentieth century, the international monetary system operated under the classical gold standard, under which each participating currency was fixed to a defined weight of gold, making bilateral exchange rates effectively constant. The system provided price stability and facilitated global trade but constrained governments' ability to respond to economic downturns. World War One shattered the gold standard as nations suspended convertibility to finance wartime expenditures. The interwar period saw attempts to restore gold convertibility, most notably the British return to the gold standard in 1925 at the pre-war parity, a decision criticized by John Maynard Keynes as deflationary. The Great Depression forced widespread currency devaluations and the effective collapse of the international gold standard by the early 1930s. The Bretton Woods Conference of July 1944 established a new order in which member currencies were pegged to the US dollar, while the dollar alone was convertible into gold at 35 dollars per troy ounce. The International Monetary Fund and World Bank were created at the same conference to oversee the system. Bretton Woods delivered exchange rate stability during the postwar growth era but came under strain as US deficits and European dollar accumulation outpaced American gold reserves. On August 15, 1971, President Nixon announced the suspension of dollar-gold convertibility — the so-called Nixon Shock — effectively ending the Bretton Woods system. By 1973, major currencies had transitioned to floating exchange rates determined by market supply and demand, a regime that has persisted. On September 16, 1992, hedge fund manager George Soros shorted the British pound against the European Exchange Rate Mechanism constraints, forcing the UK's withdrawal in what became known as Black Wednesday. Electronic trading platforms emerged in the 1990s and 2000s, replacing voice-brokered interbank markets and dramatically reducing transaction costs for institutional and retail participants alike.
Frequently Asked Questions
Formula
Brick Size = ATR(n) x Multiplier
Where ATR(n) is the Average True Range over n periods (typically 14), and the Multiplier (typically 1.0) scales the brick size. A new Renko brick is drawn only when price moves by the full brick size in one direction, filtering out noise and creating clear trend patterns.
Worked Examples
Example 1: ATR-Based Renko Brick Size
Problem: A stock trading at $158 has a 14-period ATR of 4.25. Calculate the optimal brick size using 1x, 1.5x, and 2x ATR multipliers.
Solution: ATR = 4.25\n1x ATR Brick = 4.25 x 1.0 = 4.25 (2.69% of price)\n1.5x ATR Brick = 4.25 x 1.5 = 6.375 (4.03% of price)\n2x ATR Brick = 4.25 x 2.0 = 8.50 (5.38% of price)\nInterpretation:\n1x: Standard sensitivity, suitable for swing trading\n1.5x: Reduced noise, fewer bricks, longer-term trends\n2x: Aggressive filtering, position trading only
Result: Optimal Brick: 4.25 (1x ATR) | 6.375 (1.5x) | 8.50 (2x) | Choose based on trading style
Example 2: Next Brick Price Levels
Problem: Current Renko brick base is at 156.00 with a brick size of 4.25. Current price is 158.50. Calculate the price levels for the next bullish and bearish bricks.
Solution: Current brick base = 156.00\nBrick size = 4.25\nNext bullish brick forms at: 156.00 + 4.25 = 160.25\nNext bearish brick forms at: 156.00 - 4.25 = 151.75\nCurrent price (158.50) to next bull brick: 160.25 - 158.50 = 1.75 points needed\nCurrent price to next bear brick: 158.50 - 151.75 = 6.75 points needed\nPrice is closer to forming a bullish brick
Result: Next Bull Brick: 160.25 (1.75 away) | Next Bear Brick: 151.75 (6.75 away) | Bullish bias
Frequently Asked Questions
How do you determine the optimal Renko brick size?
The most reliable method for determining optimal Renko brick size uses the Average True Range (ATR), which adapts the brick size to the current volatility of the instrument. The standard approach is to set the brick size equal to the 14-period ATR, which ensures each brick represents one unit of typical volatility. For smoother charts with fewer bricks and less noise, use a larger multiplier like 1.5x or 2x ATR. For more responsive charts with more bricks, use 0.5x ATR. Alternatively, some traders use a fixed percentage of price (commonly 1% or 0.5%) for consistent relative sizing across different price levels. The key is that the brick size should be large enough to filter noise but small enough to capture meaningful trends without excessive lag.
Why is ATR-based brick sizing better than fixed brick sizes?
ATR-based brick sizing dynamically adjusts to the current volatility of the instrument, while fixed brick sizes remain static regardless of market conditions. During high-volatility periods, ATR increases and produces larger bricks that prevent the chart from generating too many bricks from noise. During low-volatility periods, ATR decreases and produces smaller bricks that keep the chart responsive to genuine price movements. A fixed brick size that works well in low volatility may generate excessive noise in high volatility, and one that works in high volatility may be too large to capture moves in calm markets. ATR-based sizing also normalizes across different instruments, so a Renko chart of a $10 stock and a $500 stock will have proportionally appropriate brick sizes. This adaptability makes ATR the preferred method for professional traders.
How do you trade Renko chart breakouts?
Renko breakout trading capitalizes on the clean trend signals these charts provide. A bullish breakout is identified when price forms a new up brick after a series of down bricks or consolidation, signaling that buying pressure has overcome the brick size threshold. Enter long on the close of the first new up brick, with a stop loss placed one to two bricks below entry. A bearish breakout is signaled by a new down brick after up bricks or consolidation. The simplest strategy is to stay long while up bricks continue forming and reverse to short when a down brick appears. More conservative traders wait for two or three consecutive bricks in the new direction before entering. Support and resistance levels are easily identified as price levels where brick direction has reversed multiple times.
What are the advantages of Renko charts over candlestick charts?
Renko charts offer several distinct advantages over traditional candlestick charts. The elimination of time-based intervals removes the noise created by periods of low activity where candles form with minimal price movement. Trend identification becomes straightforward since trends appear as sequences of same-colored bricks without the confusing wicks and shadows of candlesticks. Support and resistance levels are clearly visible as horizontal price levels where brick direction changes. The fixed brick size creates uniform risk parameters, as each brick reversal represents a known price movement. Renko charts eliminate the emotional impact of large volatile candles that can cause panic selling or FOMO buying. They also simplify backtesting and mechanical trading system development because signals are binary and unambiguous.
What are the limitations of Renko charts?
The primary limitation of Renko charts is the loss of time and volume information, since bricks only form when price moves by the brick size regardless of how long it takes. This means you cannot determine how long a trend lasted in calendar time or whether price moves were accompanied by significant volume. Renko charts also introduce inherent lag because price must move by the full brick size before a new brick appears, potentially causing late entries and exits compared to candlestick-based signals. The lack of wicks or shadows means you lose information about intraperiod price extremes. Choosing the wrong brick size can make charts either too noisy (brick size too small) or too smooth (brick size too large), filtering out profitable moves. Gap information is also lost, which can be important for certain trading strategies.
How does the ATR multiplier affect Renko chart behavior?
The ATR multiplier directly controls the sensitivity and smoothness of the Renko chart by scaling the brick size relative to the average volatility. A 0.5x multiplier creates bricks half the size of the ATR, resulting in more bricks, more responsive trend detection, but also more false reversal signals from market noise. A 1x multiplier (standard) produces bricks equal to one ATR, providing a good balance between responsiveness and noise filtering for most trading styles. A 1.5x to 2x multiplier creates larger bricks that only form on significant moves, ideal for longer-term trend following with fewer but higher-quality signals. Day traders often use 0.5x to 1x multipliers for quicker signals, while swing traders prefer 1x to 2x. The optimal multiplier depends on your trading timeframe, the instrument volatility, and your risk tolerance.
References
Reviewed by Daniel Agrici, Founder & Lead Developer · Editorial policy