Hikkake trades, FTSE100 stocks

[tomorton]

Anyone swing trading using hikkake pattern?

I see 20 plus share price charts in the 100 developing possible hikkake patterns. This could be ideal for me as I am working and can only access tick charts and quotes a couple of times a day during the session.

Anyone having success with hikkake in any markets?

 

[tomorton]

A few nice example hikakkes from recent weeks, all potentially still running -
AstraZeneca - hikkake formed 06/08, price breached Monday's high Tuesday, then fell rest of last week: short entry below 3057.5, price now 2997.0
AMEC - hikkake formed 03/08, price breached that day's high: short entry below 1111.0, price now 1091.0
Aviva - hikkake formed 01/08, price breached that day's low: long entry above 300.2, price now 323.6

 

[tomorton]

Seem to be getting fewer false entries with this system as opposed to entering day after swing day extreme price breached as per Rivalland - maybe because hikkake trades are a reaction to a false move and take up to 3 days to point to true market direction. They certainly require patience.

One thing that does require paying attention is when the false move extends: this requires adjusting the stop which is fairly obvious, but also the SB stake.
e.g. high of hikakke day makes 535p: price moves down the next day making a lower high of 525 and a low of 510: at this point, you an enter a buy order at / just above 535, with a stop at / just below 510, giving an exposure of about 25pts at £X per pt. But if price moves lower again on day 3, with a new lower low of 500, the buy at 535 remains valid, while the stop should be moved lower to be based on 500 - but this has increased exposure to 35p, so - caution - it might be an idea to reduce the stake in £/pt at the same time.

 

[tomorton]

I suspect the actual signal is no better than any other, though the principle of trading contrary to a failed move is appealing as so often I havbe been getting sucked into moves that very quickly reverse on me.

As in any system, consistency is key as D70 points out elsewhere on swing trading but the fine details are less important than sticking to the plan and I would add gradual incremental improvements on an objective basis.

 

[tomorton]

Initial findings on trading this pattern indicate trailing stops will usually take the trade out due to harmeless volatility, so I am thinking not the right approach for hikkake trades. This is a pattern based on a fairly narrow range between highs and lows anyway so I suppose it's obvious but I also think the SB quotes cover a wider range in any day than the underlying share price so that's a factor too.

Anyway, now just using fixed stop, high or low of the pattern for shorts and longs respectively. Will take profits where seems good by TA but hoping for 2 or 3 x risk of course.

All longs cleared out Tuesday and Wednesday so now just shorts running. This is still counter-trend so I have a few buy orders pending as well as more sells but hoping for a fall into next week towards at least 5700 on the FTSE.

 

[timsk]

Hiya Tom,
I might be wrong, but one reason why your thread hasn't attracted any comments - in spite of 300+ views - might be that many members don't have a clue what Hikkake trades are! Some may even fear doing a Google search to find out, as it sounds rather similar to Bukkake which, as I'm sure you know, doesn't have much in common with trading patterns!!! A brief description accompanied by a few chart examples wouldn't go amiss, IMO. Of course, I know all about Hikkake (and nothing at all about Bukkake) so I could provide an excellent description myself, but it's your thread and I don't want to steal your thunder!

Tim.

 

[tomorton]

A good idea Tim, I'll get on with it. I think I owe you some promised contribution anyway? Best wishes.

 

[wackypete2]

Tom, weren't you doing another thread or experiment with hikkake patterns? How did that work out? I generally trade on a 5m time frame so these patterns by themselves tend to be weak but can be used as a confirming indicator.

Peter

 

[tomorton]

Pete - no, that was a swing trading thread on the FTSE100 members, but using fairly standard Marc Rivalland entry rules. Didn't work out so well as I never really got to grips with exit rules that protected profit and also found that most FTSE100 shares swung the same way at the same time - whatever I did would be over-exposure.