Description
The pattern is recognized in two variants, one bearish and one bullish. In both variants, the first bar of the pattern is an inside bar (i.e., one which has both a higher low and a lower high, compared with the previous bar). This is then followed by either a bar with both higher low and higher high for the bearish variant, or with lower low and lower high for the bullish variant. Before the pattern produces a trading signal it must be confirmed; this happens when the price passes below the low of the first bar of the pattern (in the bearish variant) or above the high of the first bar (in the bullish variant). Confirmation must occur within three periods of the last bar of the signal for the signal to be considered valid.
Read more about this topic: Hikkake Pattern
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