There are a lot of false-breakouts in the Forex market, so learning to trade with the Fakey pattern is very important since it can help you take advantage of and profit from these false breakouts, rather than falling victim to them as so many traders do. The chart below shows us a good example of a Fakey buy signal with a pin bar as the false-break bar, in a trending market.
Note in this signal that there were actually three inside bars within the mother bar structure. The next chart shows us another good example of trading a Fakey pattern in a trending market. There was a clear uptrend in place prior to the formation of this Fakey pattern. Note that this particular Fakey was one with a 2-bar false-break, meaning instead of one bar as the false-break, the false-break occurred over two consecutive bars. This is another common form of the Fakey signal to watch for as you analyze and trade the markets:.
Next, we are looking at an example of a counter-trend Fakey. In this case, it was a bullish Fakey buy signal that formed at a key support level, following a move lower.
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Since this Fakey signal was so nice and obvious well-defined and it had the confluence of the key support level under it, it was a counter-trend Fakey worth taking:. This time it was a bearish Fakey sell signal from a key resistance level. Note the market was clearly pushing higher just prior to the formation of this Fakey. We can see the dramatic sell-off that followed this bearish Fakey:.
Price Action Strategies
You now have a solid foundation on how to trade the fakey signal, from which you can build and expand your Fakey and price action trading knowledge. An inside bar just validates that expectation and therefore sets up price for a very likely bounce off of that support and resistance area, while allowing you the opportunity to milk a high probability trade setup. Locations like these are not a common occurrence, and if you can start pairing your inside bars with such locations, you already have a great tool to cherry pick the strongest of inside bar setups amidst a barrage of them on the chart — using good old price action knowledge.
Tip 3: Stick to Higher Time Frames It is commonly understood that price action is just as relevant across all time frames, and while that is true, I will bravely want to disagree with that when it comes to inside bars. Examples of these situations are important upcoming news announcements that could be holding traders from executing trades temporarily or the general variation in momentum witnessed throughout the day as markets across the globe go in and out of trading activity Asian sessions are normally weaker than the European and the American sessions.
An inside bar on the daily will hold trading activity before and after news announcements of the day as well as all the trading sessions of the day and is therefore more telling of a genuine dry- up of momentum as compared to an inside bar appearing on the 15 min chart dead in the middle of the Asian trading session. Open navigation menu.
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Is this content inappropriate? Report this Document. Description: Inside Bar Forex Trading. Flag for inappropriate content. Download now. Inside Bar. Related titles. Carousel Previous Carousel Next. Jump to Page. Search inside document. Lesson Recap — Cliff notes Tradeciety — Your Online Forex Academy But if you have ever scanned your charts for these bars you perhaps know the biggest problem in using them consistently in your analysis: Their damn frequency!
Lesson Recap — Cliff notes Tradeciety — Your Online Forex Academy Well surely a bar pattern that is so common cannot be the holy grail of profitability yeah? Documents Similar To Inside Bar. Christopher Robin.
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