What is Hikkake Pattern?

Hikkake Pattern also known as the inside-day false breakout pattern is a price pattern used by traders in the hope of identifying potential short-term reversals in the market. The pattern is often used by Swing traders and Day traders to spot perfect trading opportunities for profitable trades. This pattern was developed by Daniel L. Chesler, and this pattern has gained a huge popularity and success due to its simplicity and effectiveness.

There are basically two types of Hikkake Patterns:

• Bullish Hikkake Pattern
• Bearish Hikkake Pattern

 Spot Bullish Hikkake Pattern on Olymp Trade trading platform

Identifying the Bullih Hikkake Pattern is very easy you just need to remember the rule.

• The Bullish Hikkake Pattern is a Six-bar pattern where the first bar has a much bigger shadow than the second bar. we also call the first candle as the mother candle and the second candle a baby candle.

• The third candle appears lower than the high of the second candle.

• The fourth candle appears lower than the high of the third candle.

• The last candle opening is above the high of the second candle and that’s the best time to go for a buy trade.

Spot Bearish Hikakke Pattern on Olymp Trade trading platform

• Similarly, Bearish Hikkake Pattern is a Six-bar pattern where the first candle has a much bigger shadow than the second candle.

• The third candle closing appears higher than the second candle.

• The fourth and fifth candle closing appears higher than the third candle.

• The last candle closing is below the second. and that’s the signal where we should place a sell trade.

Homework: Check your Knowledge

• Which Hikkake Pattern is this?
•  Should You place a buy trade or sell trade?

Comment your answers below.