Fakey Trading Strategy

The fakey forex trading strategy was developed by a forex trader called Nial Fuller from Australia.
It is a very good forex swing trading strategy which is very easy to spot on your forex charts if you know what you are looking for.
Forex Indicators: The fakey forex trading strategy does not require the use of any forex indicators at all. All you need is your eyes and a bit of price action analysis of candlesticks
Time frames: Preferably  larger timeframes from 1hr to daily
Currency Pairs: Any

THE FAKEY TRADING SETUP
The forex chart below shows the what the fakey trading setup looks like for a buy (long) situation.

It indicates rejection of an important level (for example, support, resistance, fibs, pivots etc)  within the market.
Here’s what Nial Fuller Says about the Fakey Tradin Setup:
“Often times the market will appear to be headed one direction and then reverse sucking all the amateurs in as the professionals push price back in the opposite direction. This can set off some pretty big moves in the Forex market”
The  illustration to the right is what  the fakey pattern essentially consists of :

1. an inside bar
2. followed by a false break of that inside bar and then
3. a close back within its range.

The fakey entry is triggered as price moves back up past the high of the inside bar (or the low in the case of a bearish fakey).
In the chart on the right, you can see the market was recently moving higher before the fakey formed.
Note the fakey was formed on the false-break of an inside bar setup that occurred as all the amateurs tried to pick the market top, the pros then stepped in and flushed out all the amateurs in a flurry of buying.

HOW TO TRADE THE FAKEY TRADING SETUP
Buy Rules:

1. Place a buy stop order anywhere from 2-5pips above the high of the false breakout candlestick.
2. Place your stop loss anywhere from 2-5 pips below the low of the false breakout candlestick.
3. Take Profit When price moves 3 times what you risked or you can use a previous swing high as your take profit target.
4. Consider trailing stop your your trades when it is in profit so you lock in your profit as price moves upwards.

Sell Rules: (The exact opposite of Buy rules)

1. Place a sell stop order anywhere from 2-5 pips below the low of the false breakout candlestick.
2. Place stop loss 2-5 pips above the high of that breakout candlestick.
3. Profit should be 3 times what you risked initially or use previous swing low point as your take profit target.
4. Trailing stop technique should be utilized to lock in your profits as price moves down.

ADVANTAGES OF THE FAKEY FOREX TRADING STRATEGY

• The trading setup is not complicated and it is easy to spot if you know what you are looking for.
• its a forex strategy based solely on price action and candlesticks and does not have a lot of forex indicators to make things look too complex.
• explosive moves tend to happen with the fakey setup so you will get hundreds of pips easily if you trade from 1hr  and 4hr timeframes.

 DISADVANTAGES OF THE FAKEY FOREX TRADING STRATEGY

• Price action is not always 100% right, sometimes you will get caught out.
• Avoid trading fakey setups when price is consolidating (moving sideways).  Trade fakey setups in strong trending markets.

So there you have it, the Fakey Forex Trading Strategy. Try it out and see how it works for you!
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