Ichimoku on Renko Charts: The Ultimate Noise-Free Trading System!

Dushyant Thakker

Ichimoku on Renko Charts: The Ultimate Noise-Free Trading System!

A forum member asked me a great question the other day: "Does the Ichimoku indicator work with Renko charts?"

I really loved this question! Why? Because very few Indian trading platforms let you apply Ichimoku on Renko charts. Plus, there is very little information available online about this combination.

Now, I am not going to give you boring backtest data or historical percentages here. Instead, I will give you three practical ways to build your own trading system using Ichimoku and Renko.

Let's dive in!

Ichimoku in two minutes

A Japanese journalist named Goichi Hosoda created this system back in the 1930s. The coolest thing about Ichimoku? It does not care about the closing price. Instead, it looks at the exact middle of the highest and lowest prices over a set time.

Here are the 4 simple parts you need to know:

Tenkan (fast line): This is just the middle point of the highest high and lowest low of the last 9 sessions.
Kijun (base line): This is the middle point of the last 26 sessions. It tells you the medium-term trend.
The cloud: This is the magical part! It is made of two lines, Span A and Span B. They are calculated from the first two lines and shifted 26 sessions into the future.
- Price above the cloud? Super uptrend!
- Price below the cloud? Heavy downtrend.
- Price inside the cloud? Market is confused. Sit on your hands!
Chikou (lagging Line): This is simply today's closing price pushed 26 sessions backward. It helps you see how current momentum compares to the past. I generally ignore this line.

Definedge's Ichimoku explainer and this longer guide cover the topic in detail.

What changes on a Renko chart

When you switch from a normal candle chart to a Renko chart, everything changes. Why? Because on Renko, a "period" does not mean 1 minute, 5 minutes, or 1 day. A period means one single brick!

Let’s look at the math simply: if we set our brick size to 0.05%, and Nifty 50 is trading around 22,500, then every single brick is worth about 11 points.
So, our Ichimoku lines change their behavior:

Tenkan becomes the middle point of the last 9 bricks.
Kijun becomes the middle point of the last 26 bricks.

When Nifty goes into a super clean, non-stop uptrend, the Kijun line will quietly sit exactly 13 bricks below the price.

What does this mean for your exit strategy? If you want to exit your trade only when the price closes below the Kijun line, Nifty has to fall roughly 13 to 14 bricks from its absolute peak. At 0.05% brick size, that is a drop of about 0.7%, or nearly 150 Nifty points.

The biggest benefit? On Renko, Ichimoku simply becomes a game of brick counting! If the market goes completely sideways for hours, no new bricks are printed. And if there are no new bricks, the Ichimoku lines cannot move or give you false signals.

Nifty 50, Renko 0.05%, 1-minute close, Ichimoku 06/10/2026

Look at the chart above that I pulled from the Zone platform (Nifty 50, Renko 0.05%, 1-minute close, Ichimoku settings 9/26/52). Once Nifty broke heavily below the cloud, the red bricks just kept stepping down like a clean staircase with only tiny pauses. This beautiful, noise-free trend is exactly why traders fall in love with this combination!

Here are three solid trading ideas you can start testing right away. Let’s break them down in pure trader style!

Idea 1: The Classic Cross on the bricks!

This is your textbook Ichimoku strategy, but with a Renko twist. The Renko bricks completely wipe out the market noise, and the Kijun line automatically works as your trailing stop-loss!

For Long (Buy) Trades:

Entry Trigger: Buy immediately when the fast line (Tenkan) crosses above the base line (Kijun) AND the current brick closes completely above the cloud.
Exit Trigger (Square Off): Exit the trade the moment a red down-brick closes below the Kijun line.

For Short (Sell) Trades:

Entry Trigger: Short the market when the Tenkan crosses below the Kijun AND the brick closes completely below the cloud.
Exit Trigger (Square Off): Cover your position the moment a green up-brick closes above the Kijun line.

Idea 2: Cloud as the Filter, Swing Breakout as the Trigger

In this setup, the Ichimoku cloud acts like a filter to tell you which side to trade, while the Swing Breakout (SWB) behaves like the main trigger to tell you when to jump in.

For Long (Buy) Trades:

Entry Trigger: Buy only when the brick is trading above the cloud (both Span A and Span B) AND a Swing Breakout Bullish signal prints.
Exit Trigger (Square Off): Exit when a brick closes completely below the cloud.

For Short (Sell) Trades:

Entry Trigger: Short when the brick is trading below the cloud AND a Swing Breakout Bearish signal prints.
Exit Trigger (Square Off): Exit when a brick closes completely above the cloud.

Idea 3: Long-Only Strategy (Cloud as On/Off Switch)

Let’s be practical. Major Indian indices like Nifty and Sensex have structurally moved upwards over the long term. If your system keeps shorting as often as it buys, you are fighting against this natural upward drift and paying heavy charges/slippage!

A much cleaner way is to take only the long trades using the bullish rules from Idea 1 or 2. When the bricks drop below the cloud, you don't short—you just sit flat with your cash in hand. My advice? Backtest the long side and short side separately before deciding if you actually need both.

A Few Extra Tips from One Trader to Another

Compare it with standard Time Charts: Run these exact same rules on a 5-minute or 15-minute candlestick chart at the same time. If the normal time chart gives similar performance, it means Renko is just one option to cut market noise, not the only magical solution.
Play around with different Brick Sizes: Starting Nifty with a 0.05% brick size on a 1-minute close is a very smart move. But don't stop there! Try a smaller brick size, a larger one, and test it across different sectors, mid-cap stocks, and commodities (like NATURALGAS). If a strategy only works on one specific brick size and fails everywhere else, be very careful—it might just be a fluke!
You can also try this for signal on index and trade in options --> credit spread --> Can options trading generate income? Notes from my Finding Edge episode

Want to Learn more

For Renko itself, Prashant Shah's book Profitable Trading with Renko Charts is free to read for Definedge demat holders, and there is a video course on Gurukul for a deeper dive. If you would rather start with Ichimoku on candles, the Ichimoku strategy template in Momentify is a ready starting point.

Have you tried this combination? Which conditions did you use? If you share a chart or test, please mention the brick size, data interval and costs.

Dushyant Thakker, CFA, FRM
Educational only, not a recommendation to buy or sell any security or derivative. Investment in securities market are subject to market risks, read all the related documents carefully before investing.

Dushyant Thakker

On NaturalGas at 0.1%

Dushyant Thakker

Reliance 0.1% 1m

Dushyant Thakker

@Dushyant Thakker to remove unwanted signal... try adding oscillator like MACD ... MACD line above 0 for bullish confirmation and below 0 for bearish confirmation... let me know what do you think!

Dushyant Thakker

Kya Option Chart pe chalega... bilkul chalega --> Nifty 22500 PE Oct expiry 1% 1min with Ichimoku cloud and Donchain Channel Middle Band.... Buy Above Donchain Middle Band and signal above Ichimoku Cloud AND exit below Donchain Middle band. Experimental ideas to test