A trader can identify a variety of candlestick patterns. They repeat themselves throughout time, which provides a solid foundation for forecasting upcoming price fluctuations. Finding the ideal entry opportunities for your trades is feasible with the aid of patterns. I want to introduce you to the Hikkake pattern in this article.
Hikkake pattern overview
The Japanese word for the Hikkake pattern is “catch, hook, trap.” Daniel L. Chesler, CMT, created it. It was mentioned for the first time in 2003.
The Hikkake design is made up of a few candles. They develop in different ways. And they will soon inform you of the price’s course.
The Hikkake pattern can be categorized as either bullish or bearish. It will depend on the way the candles in the pattern are arranged. You’ll see the bullish one more frequently.
The candlestick type of chart is the most practical for pattern search. However you ought should be able to locate it using the bar graph as well. When the pattern is complete, you can anticipate that the price will move in the direction indicated by the Hikkake pattern’s last candle.
Let’s examine the candles in the Hikkake pattern in more detail. The Harami pattern, sometimes called the inside-day pattern, refers to the first two candles (A). The first one swallows up the second one. B is the candle whose closing price is higher or lower than the high or low of the previous candle. Next candles will be either below or above the candlestick from before (C). The closing (D) of the most recent candle is above or below the second candle’s high.
The candles in the Hikkake pattern are described in general terms in this manner. Let’s now examine the differences between the bullish and bearish patterns.
The bearish Hikkake pattern is shown in the image above. There is the inside-day first. In the first candle, the second candle is submerged. The peak of candle A is higher than the closing of the subsequent candle. The low of candle B is exceeded by the subsequent candles’ development. The low of the A candle is below the closing of the most recent candle. This suggests that you should enter a sell transaction as the price is expected to decline.
The situation in the image above appears to be completely different. The candle designated as A is consumed by the first candle. The low of candle A is lower than the closure of the subsequent candle. The high of the next candles appears to be lower than it was. The closing of the most recent candle is higher than the pattern’s second candle’s high. This generates a signal to enter a buy trade and provides information about the rising price direction.
How to trade using the Hikkake pattern at Quotex
Opening a sell position with the Hikkake pattern
I’ll use the EURUSD chart as an example. A bearish Hikkake pattern has emerged throughout the rise. You can undoubtedly identify the pattern’s four characteristic candles. The final candle in the pattern signals a shift in direction and a downward movement for the price. You ought to enter a sell trade for this reason.
Opening a buy trade with the Hikkake pattern
If you see the bullish Hikkake pattern, you should place a purchase order. The USDJPY chart below illustrates such a circumstance. A brief decrease in price is visible in the first few candles. But, a breakout follows, and the Hikkake pattern is quickly finished. The price is expected to increase, as shown by the most recent candlestick. Now place a buy trade.
Knowing how to spot various price chart patterns is a highly helpful skill. You may predict the price’s future direction using the Hikkake pattern.
I advise utilizing a 5-minute or longer time limit. A 1-minute chart has the drawback of being challenging to interpret, especially at first, and of perhaps producing some false signals.
The Quotex practice account should be kept in mind. This is the ideal scenario to test trading using the Hikkake pattern. When transferring to a live account, proceed with extreme caution because, despite being a very helpful trading tool, the Hikkake pattern does not ensure your success. Always be prepared to accept defeat.
Finally, I’d like to invite you to share your thoughts on the bullish and bearish Hikkake patterns with us. For such, the comments section is provided below.
Q: What is the Harami pattern?
A: Harami is a Japanese candlestick chart pattern that consists of two candles. The first candle is a large candle, followed by a small candle that is completely engulfed within the previous candle.
Q: How do I identify a Harami pattern on Quotex?
A: On Quotex, you can identify a Harami pattern by looking for two consecutive candles. The first candle should be larger than the second candle, and the second candle should be completely engulfed within the first candle.
Q: What does the Harami pattern indicate?
A: The Harami pattern is a reversal pattern that suggests a potential change in the direction of the current trend. If the Harami pattern appears after a downtrend, it may signal a potential bullish reversal. If the Harami pattern appears after an uptrend, it may signal a potential bearish reversal.
Q: How reliable is the Harami pattern for Quotex trading?
A: The reliability of the Harami pattern depends on a variety of factors, including the overall market conditions and the strength of the trend. It is important to use the Harami pattern in conjunction with other technical indicators to confirm potential trading opportunities.
Q: What are some common trading strategies using the Harami pattern on Quotex?
A: Some common trading strategies using the Harami pattern include waiting for confirmation of the reversal, such as a breakout or a trend line break, and using stop-loss orders to limit potential losses. Traders may also use the Harami pattern in conjunction with other technical indicators, such as moving averages or relative strength index (RSI), to confirm potential trading opportunities.