The Hikkake candlestick pattern is a price-action trading setup used in technical analysis to identify potential market reversals or trend continuations after a false breakout. The term “Hikkake,” a Japanese word meaning “to trap,” reflects how this pattern deceives traders into entering losing positions before price moves in the opposite direction.

The pattern begins with an inside bar, where the high and low of a candle remain within the range of the previous candle, signalling market consolidation. This is followed by a breakout candle that moves above or below the inside bar’s range but fails to continue in that direction. The false breakout traps traders who entered expecting momentum, creating liquidity for a reversal move.

A bullish Hikkake forms when the price breaks below the inside bar and then reverses upward, eventually closing above the inside bar’s high. A bearish Hikkake occurs when the price breaks above the inside bar but later reverses downward and closes below the inside bar’s low. Confirmation is essential, as the pattern becomes valid only after the price closes beyond the opposite side of the inside bar.

Traders often combine the Hikkake pattern with trend analysis, support and resistance levels, and momentum indicators to improve accuracy. It can be applied across various markets, including forex, stocks, cryptocurrencies, and commodities, and works best in trending environments where false breakouts are common.