In today’s high-speed world of prop trading, keeping up with the times is about more than just keeping your eyes on the same old price charts. While candlesticks and line charts are the center of attention for most, there is an entire universe of other chart types out there that can provide a greater understanding of how the market behaves—and Renko and Heikin-Ashi charts are at the top of the list.
If you’re trading for a prop firm or preparing for a contest, knowing how to use these two chart types with MetaTrader 5 (MT5) may provide you with the additional advantage you’ve been looking for. This article gets under the hood of what makes Renko and Heikin-Ashi charts so valuable, setting them up in MT5, and—most importantly—strategically applying them to a prop trading scenario.
Why bother with Renko or Heikin-Ashi?
Old-school candlestick charts are messy. With the constant flash of price action and the emotional ups-and-downs of tracking every tick, it’s not hard to get lost. That’s where Renko and Heikin-Ashi step in. They’re designed to eliminate noise and let you see the trends—without getting whiplash every time the market coughs.
Here’s the idea:
- Renko charts do not care about time at all. Yes, I said that correctly. They are concerned with price movement only. No candles are made just because five minutes have gone by. All the “bricks” you see are determined by price moving some amount.
- Heikin-Ashi charts are similar to candlesticks, but smoothed. They smooth out price information to better reflect the trend, removing the random trembles that can mislead your interpretation.
When you’re trading with a prop firm, especially during evaluations or funded stages, one bad decision from a noisy chart can mess up your whole challenge. These types of charts in MT5 can help keep your head clear and your trades cleaner.
Setting Up Heikin-Ashi Charts in MT5
Unlike Renko, Heikin-Ashi is a bit more mainstream and easier to get going with in MT5.
Step-by-Step:
- Open MT5 and select your chart—you can use any instrument you want to trade (EUR/USD, NASDAQ, Gold, etc.).
- Change to candlestick view for easy switch (Ctrl+Alt+2).
- Move to the Navigator Panel, locate Indicators, and search under Custom.
- You will typically have Heikin Ashi already installed. If not, you can download a free version on the internet and place it in your MQL5 > Indicators folder.
- Drag it onto your chart. You’ll see those smooth, flowing candles right away.
These candles don’t show actual open and close prices like regular ones. Instead, they’re based on formulas that average out price data to smooth out noise. That’s why reversals stand out better.
Quick Tip:
Hide the underlying candlesticks by right-clicking on the chart > “Properties” > “Colors” and make the “Bar Up”, “Bar Down”, “Bull Candle”, and “Bear Candle” “None.” This leaves your chart tidy with only Heikin-Ashi candles visible.
Applying Heikin-Ashi for Prop Strategies
Ride the Trends with Confidence
Heikin-Ashi is all about trend clarity. After a strong move begins, these candles remain the same color for extended periods—green for up, red for down. No misleading pin bars or fakeouts every two seconds.
Prop Tip: A lot of prop traders use Heikin-Ashi to survive larger moves. Rather than scalping for 10 pips, they seek cleaner entries and exits on color changes and candle shape.
Spot Momentum Loss
Small-bodied candles with wicks on both sides? That’s your heads-up that momentum is fading. Great time to tighten stops or look for reversals.
Example: Let’s say you’re long on GBP/JPY and the Heikin-Ashi candles start shrinking, with wicks poking out on both sides. That’s usually your cue that the bulls are running out of gas—time to take profit or at least trail your stop.
Filter Entries on Lower Timeframes
Even if you’re trading on a 4H chart, stepping down to a 15M Heikin-Ashi can assist with more accurate entry timing. That combination is magic in prop firm tests where tight risk is the monarch.
Configuring Renko Charts on MT5
MT5 does not natively support Renko charts like it does Heikin-Ashi but do not fret—you have choices.
Option 1: Employ a Renko Expert Advisor (EA) or Indicator
Install a Renko chart generator EA or offline charting tool.
How to Do It:
- Download a good Renko EA online (there are many free ones).
- Insert the EA into your MQL5 > Experts folder.
- Restart MT5 so it realizes the new file.
- Drag the EA onto a standard chart and define your brick size (e.g., 10 pips).
- It’ll generate a new offline chart—something like EURUSD (M2) is typical.
- Open up that chart (File > Open Offline) and voila—Renko bricks rather than candles.
Pro Tip:
Use the Renko brick size according to volatility. On a pair such as EUR/USD, 10-15 pips may be just fine. But if you’re on something crazy like Gold or NASDAQ, you may need 30-50 pips per brick.
