Renko Chart backtesting is incorrect. Unlike other bar types Renko bars display open and close at the same time, so when you enter on the open of a newbar, you are actually entering on the close of the new bar.
If the bar before trade entry and bar after trade entry are the same direction there is no problem, but if the bar after trade entry is the opposing direction the results are skewed.
Sell short 20.49pm price 1.3486 is correct because the end of bar equals the open of the next bar.
Sell short at 17.36pm enters at the beginning of the next bar, which is price 1.3516. However as the close and end get drawn at the same time,this bar would not appear until price had hit 1.3526. The real entry price then would be 1.3526.
This is the same reason why the custom Renko indicator freely available for NT6 gave highly favorable results for all Renko backtests, because entry on close of bar is equated to entry on beginning of next bar, and with Renko 50% of the time these are not the same.
Thanks
If the bar before trade entry and bar after trade entry are the same direction there is no problem, but if the bar after trade entry is the opposing direction the results are skewed.
Sell short 20.49pm price 1.3486 is correct because the end of bar equals the open of the next bar.
Sell short at 17.36pm enters at the beginning of the next bar, which is price 1.3516. However as the close and end get drawn at the same time,this bar would not appear until price had hit 1.3526. The real entry price then would be 1.3526.
This is the same reason why the custom Renko indicator freely available for NT6 gave highly favorable results for all Renko backtests, because entry on close of bar is equated to entry on beginning of next bar, and with Renko 50% of the time these are not the same.
Thanks
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