Renko EMA stack
This intraday futures system draws a Renko chart of 12.5-point bricks from NIFTY futures and runs three EMAs (5, 21 and 44) on the brick closes rather than on time candles. A trade starts when a brick first clears all three averages, the stop sits two bricks back, and profits are taken on the first counter brick once the trade has earned one and a half times its risk.How it trades
Results
PRE-BUILT · DEFAULTSWhere it made and lost money
In this test the type of session decided everything. Quiet days with a range under 0.75% lost ₹2,22,576 over 402 trades and won only 22% of the time, while trend days that closed near the high or low made ₹1,31,340 over 455 trades. On a narrow day the index keeps crossing the EMA stack by one or two bricks, so a fresh signal fires and the stop just 25 points away is hit soon after. On a trend day the bricks keep printing one way, the 1.5R trigger is reached and the trade rides until a reversal brick. Days that opened with a gap down lost ₹59,901 over 326 trades.
About this strategy
- Build fixed 12.5-point Renko bricks from each minute's close of the near-month NIFTY future; bricks carry over between sessions but restart with each new contract.
- Calculate EMA 5, EMA 21 and EMA 44 on the brick closes.
- Between 09:20 and 15:15, buy one lot when a green brick closes above all three EMAs and the previous brick did not; sell when a red brick closes below all three after one that did not.
- After a trade ends, a brick closing back through EMA 5 or EMA 21 arms a pullback re-entry in the same direction once a brick of that colour closes back across the average.
- Place a fixed stop at the low of the brick two before the signal brick (its high for a short).
- Once a brick closes at 1.5 times the initial risk in profit, exit on the first brick of the opposite colour.
- Exit immediately if a brick closes beyond all three EMAs the other way, and square off anything open at 15:20.
Why traders use it
Renko bricks only print after a fixed move, so the small back-and-forth that clutters a 1-minute chart disappears and trends look clean. Stacking three EMAs on top asks for agreement between short, medium and longer momentum before a trade, and the brick-based stop gives a clear, mechanical place to be wrong. Traders like that every decision, from entry to exit, can be read straight off the chart without judgement.
The year in plain words
On NIFTY futures from 1 Oct 2025 to 30 Sep 2026 with default settings, the system took 1,375 trades and won 30% of them, losing ₹58,313 before costs with a profit factor of 0.96. Winners averaged ₹3,195 against ₹1,443 for losers, but 759 trades ended at the brick stop, more than half the total. With so many trades, ₹20 per order and bid-ask slippage pushed the loss to ₹3,10,577 after costs. January (+₹35,623) and October (+₹28,984) were good, while September alone lost ₹55,279. Maximum drawdown was ₹1,24,347 before costs.
What the settings do
Risks
- Small bricks generate a very large number of trades, so brokerage and spread can turn a near-breakeven result into a large loss.
- One fast minute can print several bricks at once, and the stop fills at the next tick, which can be well beyond the brick level.
- Bricks carry over from the previous session, so an overnight gap can make the first signal of the day arrive late or at a poor price.
- Futures carry full point-for-point exposure and need margin for every trade.
Who it suits
Traders who want a rule-based intraday futures method and can automate it, since it may trade several times a day. It needs futures margin and tolerance for a low win rate with long runs of small stop-outs.
Questions traders ask
What is a Renko EMA strategy?
It applies moving averages to a Renko chart, where each brick is a fixed price move rather than a time period. Here three EMAs run on 12.5-point NIFTY futures bricks, and a trade is taken when a brick first closes beyond all three, with a stop two bricks back and an exit on the first reversal brick after a set profit.
Is the Renko EMA stack strategy profitable on NIFTY?
Not in this backtest. From 1 Oct 2025 to 30 Sep 2026 on default settings it lost ₹58,313 before costs and ₹3,10,577 after ₹20 per order and bid-ask slippage, over 1,375 trades. Statutory charges would add to that. Past results do not guarantee future ones, and brick size changes the outcome a lot.
Why does the backtest fill at the next tick instead of the brick price?
A brick is only known once the minute closes, and the price may already be beyond it. Filling at the brick's own price assumes a fill that was never available, which makes Renko tests look better than they are. This version fills every entry and exit at the first real tick after the signal.
What brick size should be used for NIFTY Renko?
This run uses 12.5 points, which produced around 1,375 trades in a year. Larger bricks cut trades and costs but react later; the percentage mode sizes bricks from the previous close so they scale with the index. Testing a few sizes on the page shows how sensitive the result is.