Harami Pattern

Harami Pattern – Basic Multiple Candlestick Pattern

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Harami Pattern is a multiple candlestick pattern that helps traders to identify trend reversal signals in technical analysis. This pattern consists of two candles normally opposite in color. In this post, we will discuss Harami Candlestick Pattern.

What is Harami Candlestick Pattern –

The word Harami means ‘pregnant’ in Japanese, and the word defines this pattern. This pattern consist of two candlesticks which shows sign of trend reversal. The first candle is long candle which shows strong trend while second candle has a small body which opens higher than first candle’s close and closes lower than first candle’s open which shows trend reversal.

Types of Harami Candlestick Pattern –

Harami candlestick pattern divided into types

1. Bullish Harami Pattern –

This pattern shows that the bearish trend is going to end and trend reversal might happen. This pattern consist of two candles, first candle is a long red candle which shows strong bearish trend and second candle is green candle having small body which opens higher than first candle’s close and closes lower than first candle’s open. This pattern is called as Bullish Harami Pattern.

2. Bearish Harami Pattern –

This pattern shows that the bullish trend is going to end and trend reversal might happen. This pattern consist of two candles, first candle is a long green candle which shows strong bullish trend and second candle is red candle having small body which opens lower than first candle’s close and closes higher than first candle’s open. This pattern is called as Bearish Harami Pattern.

Formation –

Harami Pattern

Meaning of Harami Pattern –

1. Bullish Harami Pattern –

This pattern consist of two candles, first one is red long candle and second one is green candle having small body. This pattern shows that first long red candle means strong bearish trend is going on, when second candle forms on next period which opens higher than first candle’s close which shows bulls have taken a charge and at the end of the day, the second candle closes lower than first candle’s open. Due to this we can predict that bulls are in control and bears are in panic.

2. Bearish Harami Pattern –

This pattern consist of two candles, first one is green long candle and second one is red candle having small body. This pattern shows that first long green candle means strong bullish trend is going on, when second candle forms on next period which opens lower than first candle’s close which shows bears have taken a charge and at the end of the day, the second candle closes higher than first candle’s open. Due to this we can predict that bulls are in panic and bears are in control.

Examples –

1. Bullish Harami Pattern –

Harami Patter

In above chart, we can see when bullish harami pattern forms at support zone marked by using blue line, it gives strong signal to go long. Traders go long at the end of the day when second candle expecting to close according to rule. Some traders go long on next day also and put stop loss below the low of first long red candle. In chart, we can see how price reacted from bullish harami pattern. A strong bullish trend started from the bullish harami pattern.

2. Bearish Harami Pattern –

Harami Pattern

In above chart, we can see when bearish harami pattern forms at resistance level marked by using blue line, it gives strong signal to go short. Traders go short at the end of the day when second candle expecting to close according to rule. Some traders go short on next day also and put stop loss above the high of first long green candle. We can see how price dropped from the bearish harami pattern.

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