Hikkake Pattern Forex Indicator
Introducing the Hikkake Pattern Forex Indicator
MT4 Forex Indicator Overview
The free download link of the Hikkake Pattern MT4 forex indicator is placed at the end of this post. Once you’re done, your trading chart should look similar to the example below.
The general idea behind that forex indicator is that price makes a false breakout from a rangebound, only to reverse and move in the original direction quickly. This action creates a so-called hikkake pattern on the chart, and this name means a “trap” in Japanese.
As you can see, it consists of two moving average lines, one solid and the second dotted. During an uptrend, a selling opportunity occurs when the price touches or crosses below the dotted line. Conversely, the price crossing above the dotted line indicates a potential buying opportunity. Usually, the profit target is a few candles above or below after crossing the opposite blue line.
An aspect worth paying attention to is the distance between these two lines. The higher the gap, the better. Avoid trading during the very tight alignment of these two.
Settings
There are quite a few variables you can customize to fit your preferences or trading strategy.
How To Trade With The Hikkake Pattern Indicator?
Generally speaking, the signal trigger is based on false breakouts and then an actual reversal. So let’s deep dive into how to use that forex indicator in a few easy steps.
Hikkake Pattern: Buy Signal
- The dotted line is below the solid line
- Price touches or crosses above the dotted line
- The distance between the two lines is big enough
- Open long trade when the above conditions are met
- Set stop loss(SL) a few pips below the most recent market’s low point
- Take minimum profit after crossing the solid line, but often the price still rises for a few candles
Hikkake Pattern: Sell Signal
- The dotted line is below the solid line
- Price touches or crosses above the dotted line
- The distance between the two lines is big enough
- Open short trade when the above conditions are met
- Set stop loss(SL) a few pips above the most recent market’s high point
- Take minimum profit after crossing the solid line, but often the price still falls for a few candles
Conclusion
The Hikkake Pattern is one of the most well-known reversal patterns and is worth utilizing in your trading endeavor. It can be applied to any currency pair and time frame, but we suggest using it on intraday charts. We think it’s a good fit for somewhat knowledgeable traders, but after some little training, beginners may succeed too. It would be a good idea to use it in conjunction with some technical analysis of forex indicators defining sideways market conditions like the MACD Flat Trend Detector.
Hikkake Pattern Forex Indicator download link
