Renko charts are very similar to point-and-figure charts in that they track the movement of a security’s price irrespective of time. Whereas a point-and-figure chart stacks box sizes in a column, box sizes are spaced next to each other at 45-degree angle offsets.
As with point-and-figure charts, Renko charts are designed to help analysts and investors clearly spot trends in the securities that they are tracking. Renko charts utilize the concept of box size just like point-and-figure charts, which is also determined at the discretion of the analyst or investor.
While Renko charts do highlight trends and identify support and resistance levels, they also have limitations. They do not contain the volume of information that candlestick or bar charts do, such as high and low price for a given day. They also lack the time-based portion of the data, so ranges can appear to be longer or shorter than they would on other chart types.