Fakey pattern (Inside Bar False Breakout)

The Fakey pattern (Inside Bar False Breakout) indicator identifies a specific price action sequence where an inside bar is followed by a false breakout, signaling potential market reversals or continuation traps.

Usage

The Usage section focuses on identifying price action traps. Traders can use the Fakey pattern to spot "stop-hunting" scenarios where the market briefly breaks the range of an inside bar before reversing.

• Bullish Fakey: Occurs when an inside bar is formed, followed by a bar that breaks below the low of the mother bar (the bar preceding the inside bar) but closes back within or above the range. This is highlighted with a green background.
• Bearish Fakey: Occurs when an inside bar is formed, followed by a bar that breaks above the high of the mother bar but closes back within or below the range. This is highlighted with a red background.

Details

The Fakey pattern is a three-bar formation consisting of:

1. Mother Bar: The initial bar that sets the range.
2. Inside Bar: A bar whose high and low are completely contained within the range of the Mother Bar.
3. False Breakout Bar: A bar that attempts to break the Mother Bar's high or low but fails to maintain that direction, closing back inside the range.

This script automates the detection of these conditions, ensuring that the false breakout bar specifically references the Mother Bar's extremes to confirm the "trap" effect.

Settings

As a pure price action script based on fixed candle relationships, this indicator currently relies on hardcoded logic for pattern detection and does not feature external input parameters.

• Bullish Color: The background color used to highlight bullish fakey patterns.
• Bearish Color: The background color used to highlight bearish fakey patterns.

FAQ

How do I trade the Fakey pattern?

Traders often look for the pattern to form at key support or resistance levels, using the false breakout as a signal that the prevailing move has run out of momentum.

Does this indicator repainting?

No, the indicator calculates based on bar closes. The background highlight will appear once the false breakout bar has closed and confirmed the pattern requirements.

How can I access Fakey pattern (Inside Bar False Breakout)?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.