--- title: 'Renko + ADX + MACD Strategy Step by Step | Complete Price Action Setup' source: 'https://youtube.com/watch?v=pfAClbIZiHM' video_id: 'pfAClbIZiHM' date: 2026-07-23 duration_sec: 856 channel: 'Manual do Trader' --- # Renko + ADX + MACD Strategy Step by Step | Complete Price Action Setup > Source: [Renko + ADX + MACD Strategy Step by Step | Complete Price Action Setup](https://youtube.com/watch?v=pfAClbIZiHM) ## Summary This video presents a trading strategy called the 'Frankenstein combo,' which combines Renko charts, the ADX indicator, and the MACD histogram to filter out market noise and identify high-probability trades. The presenters, L and Ricardo, demonstrate how this setup helps traders avoid false signals and focus on strong trends. ### Key Points - **Introduction to the Frankenstein Combo** [00:03] — The presenters introduce the concept of combining Renko charts (body), ADX (brain), and MACD histogram (heart) to create a powerful trading filter that reduces noise and false signals. - **Renko Charts vs Candlesticks** [01:52] — Renko charts are based on price movement, not time, so they eliminate noise from candlestick wicks and only create new bricks when the price moves by a set amount. - **ADX as the Brain** [02:33] — ADX measures trend strength, not direction. A reading above 25 indicates a strong trend, while below 25 suggests a weak or sideways market. The rule is to only trade when ADX is above 25. - **MACD Histogram as the Heart** [03:14] — The MACD histogram measures momentum (speed and acceleration). Growing bars indicate increasing momentum, while shrinking bars indicate slowing momentum. Entries are taken when the histogram aligns with the trend direction. - **Entry Filters: Three OKs** [05:46] — Three conditions must be met: 1) Price relative to 20-period EMA (above for buys, below for sells), 2) ADX above 25, 3) MACD histogram direction aligned with the trade (rising for buys, falling for sells). - **Stop Loss and Take Profit** [07:45] — Stop loss is set at 3 Renko bricks, and take profit at 6 bricks, giving a 2:1 risk-reward ratio. The strategy is demonstrated on the mini-index with 10R risk per trade. - **Patience and Risk Management** [13:08] — The filter eliminates about 80% of potential entries, requiring patience. Traders should test in a simulator first and focus on quality over quantity. ### Conclusion The Frankenstein combo effectively filters out low-probability trades, requiring patience and discipline. Backtesting and simulation are essential before live trading. ## Transcript to open your manual. I am L. And I am Ricardo. And welcome to our laboratory. And today we're going to teach you how to stop seeing things that don't exist. Yes, that's because some traders look at candlestick charts as if they were looking at clouds in the sky. Oh, I think I saw a hammer. Oh, I think I saw a shooting star. In the end, the only thing that comes to light is your account balance. The problem is the noise, Luiz. It's the excess of unnecessary information. Therefore, today we're going to present the Frankenstein combo. We're going to stitch together three powerful tools to create a filter that won't let you fall into a trap. We got Renko's body, yes, those little bricks, ADX's brain, and those little bricks, ADX's brain, and McEndy's heart. Is it a monster? Yes, it's a machine. Yeah, no [laughs] Ronaldo again. But it's a monster that works with you, not against you, preventing you from screwing up again while you operate. If you want to avoid the uncertainty of candlesticks and enter the mathematical reality that this monster brings, come with us, turn on the intro. you stop using candlestick charts for this type of setup? And now, candlestick charts for this type of setup? And now, if you already know about Renko, if you've already seen our other videos about Renko, go to the minute below so you can skip this part about the body and go straight to the part about the brain, where we talk about more important information for those of you who already know all about a look at our video here. First, Kendle, he's a slave to the clock. He's the kind of employee who clocks in at 5 a.m., even if he hasn't done anything. If the market is stagnant, the candlestick continues to move, in this case sideways. No, the exchange rate will only move when the price moves. If the price doesn't move, obviously a new brick won't be built. And this is very important for you to avoid big problems. This is the foundation of our monster. Exactly. Renko focuses on price; it cleans up all the noise from the candle wicks. When you look at the ranking, you see the bone structure of the market. He is our foundation, but like any body, he needs a walls. And now comes the brain of our monster, the ADX. The ADX doesn't care if the market goes down or up. He just wants to know what this movement has ? Strength. ODX, he works more or a club and he'll say, "Dude, don't go in, if the DJ's bad and the drinks are expensive, man, don't go in." If ADX is below level 25, it enters action. The rule is clear. A DX above 25. This confirms that the Smart Money Concept came into play without a high ADX, without a sleeping there. The heart of our monster is the Histogram MAC. It measures momentum, that is, it measures the speed and acceleration of the price. And you, for God's sake, be quick and give us a like, comment below, subscribe to our channel so you don't miss any of our content, and use your heart and think of us. So we're going to focus on the bars in the histogram. If they're growing and racing with the urge to buy them. If they shrink, the movement is slowing down, the heart is beating weaker, the movement is tiring. We want to get in right when the heart is right there, beating strongly Now we'll show you in practice how this works with the open profit. So let's set up our strategy. So let's place our bet of 10R, which would be 10 ticks on the mini-index, right? We are. So let's also put are. So let's also put our beloved ADX our beloved ADX down here, and let's also put our Mac of Mac histogram, okay? We won't need the lines, the histogram alone is fine. At Mac, we have, right, a color scheme. If you'd also like to have this coloring, send us a message here on our Instagram, @manualdotraderoficial, and we'll send you the coloring rule. So, we right-click and select "insert backend rule". Oh, how much prettier it looks, right? ADX is already configured here, right? Nine, nine periods here, right? Nine periods with an average of nine. That's correct. So, the only thing we're going to need to only thing we're going to need to apply is a line, which is the 25 line. Let's put its price here. 25. Now we're all set up, 25. Now we're all set up, right? So, let's get to our strategy. I also forgot to include our 20-semester average, right? 20, 21 periods, so there's not much of a problem. If you prefer 20 or 21 periods, that's fine. average of 21 periods. I always like to use the exponential moving average because it's faster for those of us who work with day trading, right? Yeah, she's better. I'll also add a little white to make it easier to see. Remember that this strategy can be used for both buying and selling. So, how are we going to do it? What will our entry signal be? We need three OKs for this to work . The first OK sign is that if the asset's value is below the 20-period moving average, we only consider selling. If it's above that price, we only think about buying. This is the first basic filter for almost all strategies, right? The second filter is that the ADX must be above 25. This indicates trend strength. So, the more points it has, right, 25, 30, 38, 40, the stronger the trend is. Therefore, the probability of it maintaining its strength is higher. In this case, it 's in a downward trend, right? Oh, it doesn't matter. If it's in an upward trend, it also has to be above 25. So, it's always above 25 that indicates strength. DX is a very, very interesting indicator. And our third filter is the MACD. If mine is facing down on the sale, right? So that's another OK too. If it's facing upwards, we'll only think about buying. So we need to get all three OKs in order to operate. So let's take a look here. The price is below average, and the MACD is also below average. However, our ADX doesn't indicate anything. It indicates that the trend is weak. Then we're not going in. Wow, but I would have caught all that movement. I would have caught it. But that's what the filter is for, right? You're going to reduce your profit, right? Maybe, but it's also going to prevent you from making mistakes, right? And entering sideways markets, and we'll be able to clean up, right? Polish our mistakes. So, DX is above 25, our mistakes. So, DX is above 25, OK? The price is below average, OK? And the MACD is also indicating a downward trend, indicating strength, right, of a downtrend. So, we can get the sales OK. Let's take a look here. It broke here. So, if it breaks out at this point here, we'll enter, of course, on the next candle. Where will our stop be, right? And where is our gain? Our stop loss is three times the rank, which is three bricks in the example above, right? And our profit is six bricks below, meaning it's a two-to-one profit. I'll put it here. So, let's go. So let's put it here in our risk and reward, look, 1 2 3 bricks. So our stop loss is up here and our take profit is down here. And it went perfectly here, we even lost 55 points and we managed to win our 270 points. Let's move on to the next operation. Could we continue doing this? It would be possible to continue doing it because everything indicates it can. But look what the problem is. The MACD is already coming back down because, well, with this pullback here. So you just have to be careful because if it's coming back down, it might reverse the trend and go back up, right? Well, then you saw that it broke down here and you can already make a new entry because everything is showing a green light. So, the price is down, the ADX is up here, and the histogram is going down again. In other words, you can enter this operation again. Let's put here 1, 2, 3 stop-loss bricks and six profit bricks. Perfect. Another beautiful entrance here. Two entries in a row here with a very beautiful and very simple game to make, right? At some point, of course, it's going to turn around and you're going to get stopped. But look here, look at ours. The ADX is OK, the price is below average, but look at our histogram, it's like this, it's green. So, the MACD is preventing us from entering a sell position here. And that's the good part, right? This is our filter. Let's think about a little purchase here, okay? Price purchase here, okay? Price above average. OK. ADX is there, isn't it? The histogram is here, right, the MACD, but the ADX doesn't allow us to make an entry. So, unfortunately, we didn't win here. Okay, let's go. DX is letting us off the hook here. The MACD is both releasing and not releasing data. Why is the MACD is both releasing and not releasing data. Why is the MACD showing a green OK signal, even though it's falling? If it's falling, we're not going to go in, because that also indicates it's starting to lose strength. So we're not going in, we're going to skip that entrance, unfortunately. Well, nothing else came up from here because ADX isn't showing any more results. Another entry was made in the sale here. Let's see if this entry worked. Oh, it broke here. So, we would set up our little here. So, we would set up our little shop, in this case here. 1 2 3 shop, in this case here. 1 2 3 bricks upwards. Wow, another profit here, huh? Perfect. Oh, it almost hit our stop loss, but it went down there and we made another profit. Well, let's see. So far it's going Well, let's see. So far it's going 100%, huh? Yeah, perfect here too. I don't think we even need to measure here, right? He just checked in here and left. Perfect, then. Another entrance. I'll look for a place to buy something here someday. Here's a simple purchase example. Oh man, but it's showing up here, look, the ADX is going up, our histogram is rising. It's time to go in, yes, it's time to go in. So, let's put it here. We came in here, right? Let me see here. Wait a minute. which turned here. Here it is. It broke through, closed above. Enter on the next candle. So let's move on to the next candle. Our three-brick game next candle. Our three-brick game surgery be performed afterwards? Let's see. We had our game here. The price had a pullback here on average. Beautiful, even with that pullback. But ADX wouldn't allow it; we were going to make a beautiful profit, it would have been amazing, but it would n't allow it. Let's see when he 'll allow it. Only in this candle here. So, it's in this candle here that it allows it. Would I make that entry? I wouldn't make that entry because the price has already moved far outside the average; it's already gone up a bit. It's possible he might make a pullback, but I wouldn't make that entry, even though pullback, but I wouldn't make that entry, even though the ADX is indicating an upward trend and the MACD is too. I wouldn't have made that entry because of these little problems , but let's see, if I had made the entry, it would have definitely been a win. Look, he didn't even touch the stop sign, did he? Because we entered at this candle here, it didn't even try to go to the stop loss and went straight into the trade. Another beautiful, straight into the trade. Another beautiful, gorgeous, and spot-on game. And just to finish up, let's do one more. Oh, the MACDG here doesn't allow any entries. No entry is allowed. Oops, it turned into Maced. He came in here. Now, just to finish the example with a stop loss, right? Yeah, MACD released here, ADX released in this position here. I'm not even going to put a stop loss there because you could see it just went down, so we lost three little bricks here, but you could see it's it's easy to understand, you just need to observe these two indicators, so it 's not very difficult to apply live, okay? I hope you enjoyed it. Let's final considerations. And after this great practical demonstration, it's important for you to know that the Frankenstein cover requires something that you've probably already noticed and that many traders don't have. Patience. many traders don't have. Patience. This monster will filter out about 80% of the bad entries and show you that you should only enter 20% of them, which will probably require more than just patience, but also excellent risk management. We also have a great video here that discusses risk management. It's about trading quantity for quality. It's about stopping being that guy who clicks 50 times a day in such a rush and calming down. You take two or three peaceful lunch. And remember, very importantly, And remember, very importantly, test it in the simulator first. Don't play a game you haven't practiced yet. And if you liked this video, remember to like it here, subscribe to our channel, and I'm sure you'll also like this next video that will be shown on the screen. Until next time. M.