By Adinah Brown

What is it about the Fakey Pattern concept that attracts so many traders’ attention? If you are new to trading and are asking yourself “what is this Fakey Pattern anyway?”, let’s start there.

The Fakey Pattern is the occurrence of sudden price hikes during a false break within the bar structure. In other words, one direction goes down the dumps and within split seconds the other direction rises. One might say, a blessing in disguise for those on the losing end of the trade. The thing to focus on is this:  the price or trade going to the false trade, signals a guaranteed price hike on the opposite side, inside the bar pattern.

Now what causes this false-breakthrough? This is somehow a discovery in a world where good chances are bad ones.

There are two instances that can cause a Fakey Pattern:

1.       The big players in the market like banks and big time traders intentionally force a price reversal. This is possible when the big traders utilize their stop losses on purpose and gather all small retail traders.

2.       When the big players react or retaliate to a significant event or change in the market. The deed then forces an immediate recovery with the price or promising market direction.

These are clear indicators that a Fakey Pattern surfaced. There is no 100% guarantee in trading but the fakey pattern is a close 70% to 80% guarantee that the price will continue to move upward, opposite to the false breakout.

How to Trade a Fakey Pattern?

Traders can make use of the Fakey Pattern in almost all trading platforms like a currency exchange, binary option, trending market, or against a trend. The fakey’s purpose is to provide a green light to an entry point. Many traders have received good profit from these breakouts. The key is to familiarize yourself on several bar patterns. Grasping an accurate understanding of how these patterns work, gives you a higher probability for profit. Don’t grab every opportunity when a breakout presents itself, however. The bar needs to make sense; if there is something wrong with the bar pattern, that’s a red light. If you’re a beginner trader and you already know about the Fakey Pattern, stick to the daily charts. They are easy to understand and easy to monitor. Don’t go diving to lower time frame charts immediately. Familiarize yourself first with Fakey bug signals, Fakey with pin bar, false break and false patterns. These are the indications within a bar pattern, letting you know that you’re on the right track.

The Fakey Pattern is truly a discovery in the price action setup. It says that a decline isn’t always a bad thing. The Fakey setup is predicted to make its biggest impact on Forex or the trending market. Looks like only time will tell.  Just remember, the Fakey Pattern is more accurate in daily charts so don’t go out of zone. One great thing about the Fakey is that it has given more traders the motivation to trade, knowing there is a safe and profitable zone. This is why monitoring and knowing all the components of a trade is important for a successful trading career.

About the Author:

Adinah Brown is a professional writer who has worked in a wide range of industry settings, including corporate industry, government and non-government organizations. Within many of these positions, Adinah has provided skilled marketing and advertising services and is currently the Content Manager at Leverate.