Essentially, the Hikkake Pattern is a failed inside-bar pattern. The inside bar is a candlestick formation that occurs when a certain candle closes inside the range of its predecessor. A breakout of the range is confirming the Inside Bar trade.
The Hikkake trades on a failure of the Inside Bar, entering trade when the range is broken again, to the opposite side.
There are two examples in nyse market. General Electric is a possible hikkake pattern. The next weed the price should close below 18 and the reversal bearish pattern will be confirmed
How To Trade The Hikkake
1. Spot an Inside Bar candlestick formation - Look for big candles followed by smaller ones that are inside their range.
2. Wait for a breakout of the range.
3. Set Trading Orders - Set orders to join the trade at the breakout of the range to the opposite direction.
4. Stop Loss - Place stop loss above the highest high of last 3 candles (for short), or below the lowest low of last 3 candles (for long). This ensures that stop loss is in a logical place, near Support or Resistance.
Texas instrument is another example. The price shoul be close bellow 25,89.