Explosive Ichimoku Renko Trading Strategy (How To Swing Trade Stocks Like A Samurai)
Explosive Ichimoku Renko Trading Strategy (How To Swing Trade Stocks Like A Samurai)
ELI5/TLDR
Take two old Japanese charting tools and stack them. Renko charts strip out time and only draw a “brick” when price moves a fixed amount, so they hide the small wiggles. The Ichimoku cloud is a shaded band that tells you whether the trend is up or down. The pitch: only go long when bricks are green, above a green cloud, with a confirming line above the cloud. Only go short for the mirror image. When the cloud keeps flipping colour, sit on your hands.
The Full Story
Renko: charts that ignore the clock
A normal candlestick chart prints a new candle every hour, or every day, whether or not anything happened. Renko charts throw the clock away.
Renko charts eliminate the time component of trading and only focus on the price itself.
Instead of candles they draw “bricks.” You pick a brick size, say 100 points. A new brick only appears once price has moved that full 100 points in one direction. A flat, boring market produces no new bricks at all. The point is noise removal: small back-and-forth moves never make the cut, so the chart looks cleaner and the trend is easier to see. The bigger the brick, the more it smooths. This video uses 100-point bricks, which makes it a swing-trading timeframe rather than a scalping one.
Ichimoku: the cloud and the lagging line
Ichimoku is normally a tangle of five lines. The presenter drops most of them and keeps two.
The first is the Kumo cloud — a shaded band built from two lines (span A and span B) that acts as a moving zone of support and resistance. Price above the cloud is bullish, below is bearish. The colour matters: green cloud is an up bias, red is a down bias. Width matters too — a wide cloud is strong support or resistance, a thin one is weak. And one hard rule:
The last important rule is that you should never trade inside the Kumo cloud.
If price is inside the band, you wait for it to exit before doing anything, however tempting the setup looks.
The second component is the lagging span — current price plotted shifted backwards in time. It is a confirmation gauge. Above the cloud, it agrees the trend is up. Below, it agrees the trend is down. Whipping up and down through the cloud, it is telling you the market can’t make up its mind.
Stacking the two
Put Ichimoku on a Renko chart and the rules collapse into something simple. A clean buy needs three things at once: a fresh green brick above the cloud, a green and ideally wide cloud, and the lagging span above the cloud. A sell is the exact mirror — red brick below a red wide cloud, lagging span below. The presenter walks through chart examples, including a Tesla short, where waiting for the cloud to actually turn red kept you out of an early, premature entry. He likes to see a pullback of two or three bricks before re-entering an existing trend rather than chasing.
Knowing when not to trade
The most useful part is the filter for junk markets. Three tells that a market is untradable: a lagging span that keeps crossing back and forth through the cloud, a cloud that keeps changing colour (red, green, red, green), and Renko bricks that fail to make higher highs or lower lows and slice through the cloud easily.
Clearly the market is in indecision and if I see the cloud that is changing its color, then maybe it’s better not to trade this market at all.
The honest admission buried in here: even a textbook-clean setup can lose. One example buy “was a losing trade, or a breakeven trade at most” because price printed one green brick and reversed.
Key Takeaways
- Renko bricks replace time-based candles. A new brick prints only after price moves a set distance (here, 100 points), filtering out small chop.
- Ichimoku Kumo cloud is a shaded support/resistance band; green = bullish bias, red = bearish, wide = strong, thin = weak.
- Lagging span is current price shifted backwards, used purely as confirmation: above the cloud confirms up, below confirms down.
- Buy signal: new green brick above a green, wide cloud, with lagging span above the cloud. Sell signal: the mirror image, all red.
- Never trade inside the cloud — wait for a clean break out either wall before acting.
- Prefer a pullback of two or three bricks before re-entering an ongoing trend; don’t chase an uncorrected move.
- Stand aside when the lagging span saws through the cloud, the cloud keeps flipping colour, or bricks fail to make higher highs / lower lows.
Claude’s Take
This is a competent, beginner-friendly walkthrough of a well-known indicator mashup, and almost certainly AI-narrated — the flat synthetic delivery and the “could” / “consisted” typos read straight from a script.
Two genuinely sensible ideas are doing the heavy lifting: Renko’s noise reduction and the discipline of standing aside when signals contradict. The “don’t trade a colour-flipping cloud” filter is the most valuable thirty seconds in the video, because most retail blow-ups come from forcing trades in chop.
The weaknesses are the usual ones for this genre. Every example is hand-picked in hindsight, where the trend is already obvious; nobody shows you the live, ambiguous moment of decision. There is no backtest, no win rate, no risk-per-trade maths, and no discussion of the lag baked into both tools — Renko bricks and the cloud are both confirming-after-the-fact, so you are always late to the turn and you give a chunk back on every reversal. The title word “explosive” is marketing; nothing here is explosive. It is a slow trend-follower that does fine in trends and bleeds in ranges, which is true of essentially every trend-following system ever drawn.
Useful as a clean definition of Renko and the Ichimoku cloud. Not a tradable edge on its own. A 5 — clear, honest about its losers, but no proof and nothing you couldn’t get from any indicator explainer.