Fakey Price Action Trap Pattern

Fakey is a price trap pattern when the price just exits the inside bar candlestick pattern. If you are new to the inside bar candle pattern, check out this article.

The Fakey candle pattern is very important because it attracts the attention of big boys entering the market. The big boy will want to trap traders at breakout prices, so you will find this pattern works very effectively.

To visualize this model clearly, you see the illustration below

Here, you see a bearish fakey candle and a bullish fakey candle pattern.

Note: Not all fakey price trap signals are the same, there are other variations with combinations of familiar price patterns like a pin bar or engulfing.

See the picture below for easy visualization:

How to trade with Fakey candlestick pattern

The candlestick pattern that cannot be traded alone needs to be combined with the trend, many traders ignore this and lose money due to the trade price action. According to Nial Fuller's documentation and personal experience, fakey needs to be used in conjunction with the resistance and support levels on the chart.

The fakey candlestick pattern is good in that it both gives you a good entry point and tells you where to place a safe stop loss.

In this picture, you see the market is trending up and then starting to go sideways. You can find fakey models at support. Your stop loss will be placed below the support trap candle (where the red arrow is).

Another example of a fake signal, this time the market is not trending but is moving sideways. You will look for fakey candlestick patterns at resistance or support.

Fakey has appeared in financial market flash crashes

Fakey candlestick pattern can be said to be the most powerful candlestick pattern in technical analysis. If you observe the news a lot, you will see this candlestick pattern appear a lot.

A typical case is that in September 1992, George Soros shorted the pound, causing the Bank of England to collapse. Many people only know him as a person who knows how to seize the opportunity and trade in the direction of fundamental analysis. However, if you look at the moment chart, you will be surprised by the Fakey candlestick pattern.

And most recently, there have been some flash crashes with the appearance of fakey candles.

USDCAD in the past week

GBPUSD September 6, Ms. Theresa May speaking about Brexit.

EURUSD after the FOMC meeting on 20 July 2017.

Fakey is a very powerful signal, especially in times of strong market volatility.