The following chart shows a bearish harami cross in American Airlines Group Inc. (AAL). The price had been falling in an overall downtrend, but then flattened out into a large range. The price moved higher into a resistance area where it formed a bearish harami pattern. This provided confirmation and an opportunity to exit longs or enter short positions.

The image above shows that the bullish harami candlestick pattern looks like a pregnant woman who is carrying a child in her womb. The red long bearish candlestick stands for the woman and the small green bullish candlestick represents the child in the womb. Investors and traders use this distinct shape of the pattern to identify the bullish harami pattern on price charts. The second candlestick in a bullish harami pattern is also sometimes a doji candlestick.

How to catch trades that immediately EXPLODE into profit

1. There are more than 40 types of candlesticks including bullish candlestick patterns, bearish candlestick patterns and continuation candlestick patterns.
2. To make a bearish harami pattern more useful as a trading signal, traders usually combine it with other technical indicators.
3. If you use the money flow or the price oscillator, the chance to match a Harami with an overbought/oversold signal is minimal.
4. A bullish harami is a candlestick chart pattern that typically signals a potential bullish reversal in the price of an asset.
5. There are two main disadvantages of the bullish harami including the need for trend confirmation while using it and its inability to be used in isolation.

In this illustration, we can see a bearish trend (downtrend) that preceded the candlestick pattern. Hence, when the STS confirms the bullish harami in this manner, it increases the pattern’s probability of successfully leading to a bullish reversal. Investors studying for harami candlestick patterns should start by looking at periodic market performance in candlestick charts. A bullish harami relies on initial candles to indicate that a downward price trend is continuing and that a bearish market appears to be pushing the price lower. The bullish harami is considered to be a reliable setup for identifying potential trend reversal from down to up.

The image shows that the third candlestick of the pattern is a bullish candlestick confirming the trend reversal. The third or fourth candlestick is considered a bullish harami confirmation candlestick only if it closes above the prior bullish candlestick. There are two types of harami patterns – the bullish harami and the bearish harami. The Bearish Harami is a candlestick pattern that signals a potential reversal in a bullish trend. Although it may not be the strongest reversal signal, it is still a valuable tool for you to use when identifying market turning points.

Combining Fibonacci retracements with the Bullish Harami pattern provides a more comprehensive view of the market, enhancing your trading strategy. If a Bullish Harami pattern forms at $80 after a downtrend, and the recent high was $100, you could set your profit target around $90, where resistance might occur. By placing your stop-loss here, you limit potential losses while giving the trade enough room to develop if the anticipated reversal occurs. Again, the most important aspect of the bullish Harami is that prices gapped up on Day 2 and the price was held up and unable to move lower back to the bearish close of Day 1. The most important aspect of the bearish Harami is that prices gapped down on Day 2 and were unable to move higher back to the close of Day 1.

Conversely, in a bearish Harami, it signals indecision or a potential reversal from the prior bullish trend. A bearish harami is a two bar Japanese candlestick pattern that suggests prices may soon reverse to the downside. The pattern consists of a long white candle followed by a small black candle.

1. The image below shows a trend confirming candlestick in a bullish harami pattern.
2. The first black arrow shows an increase of IBM and price interaction with the upper bollinger band.
3. The EMA plus Fibonacci strategy is strongly profitable, but sometimes the fast EMA could knock you out of a winning trade relatively early.
4. It’s worth noting that the pattern formed above the trendline, suggesting that the market might be overextended.
5. Conversely, if the Bearish Harami pattern had formed below the trendline, it would not have been as strong an indicator.
6. It suggests a possible shift in market sentiment and can indicate either a momentary pause or consolidation in the price movement or a trend reversal.

Types of Thrusting Line Candlestick Patterns

This is especially true when it occurs at a price level that lacks significance or when the confirmation tool you use does not align with the reversal signal. Candlestick charts offer detailed information about price movements within a particular time frame, including the opening, closing, high, and low prices. Each « candlestick » consists of a body (the range between the open and close) and wicks (shadows) that extend to high and low prices.

There are two main disadvantages of the bullish harami including the need for trend confirmation while using it and its inability to be used in isolation. Both the disadvantages stem from the bullish harami pattern’s tendency to produce false positive signals from time to time. Harami is a type of Japanese candlestick pattern represented by two bodies, the first of them, larger, with black or red body and the second one, white or green. Its name derives from the Japanese word that means “pregnant” because the graphic that shows resembles a pregnant woman. Generally, the Harami pattern candlestick shows a changing trend.1 Like other Japanese patterns it too can be bullish or bearish.

For instance, in a bullish engulfing pattern, we can quickly identify a strong buying conviction from the second bullish candlestick, which fully engulfs or covers the range of the first bearish candle. In contrast, the bullish harami’s reversal signal doesn’t necessarily arise from sudden buying conviction but rather from the diminishing selling pressure. Volume is perhaps one of the most fundamental technical analysis tools you can use to increase your success rate in trading. Unlike other technical indicators that rely heavily on price, volume is independent of price, making it one of the most essential concepts to understand in trading. As a rule of thumb, when a bullish harami pattern occurs, we want to see above-average volume on the second candle (the small bullish candle), which is the case in this illustration. This is because the significant volume, coupled with the jump in price (gap up), shows that buyers are starting to gain control.

Harami Candlestick Pattern- Everything you need to know about

The small bullish candle will suggest a weak exit pressure and vice versa. The bullish harami is considered an accurate indicator of trend reversals when used along with other technical indicators. The reliability and accuracy of the bullish harami pattern are not dependable when it is used in isolation as there are chances of false positives. Traders typically combine other technical indicators with a bearish harami to increase the effectiveness of its use as a trading signal. For, example, a trader may use a 200-day moving average to ensure the market is in a long-term downtrend and take a short position when a bearish harami forms during a retracement. In summary, the bullish harami is an important candlestick pattern for traders looking to spot trend reversals in bearish markets.

Nevertheless, since a bigger second candle generally results in a higher chance of a trend shift, it is then important to wait for confirmation from a subsequent candle. A smaller body on the following Doji must close higher within the body of the previous day’s candle to form a bullish harami, indicating a larger possibility of a reversal. Traders can analyse bearish and bullish harami formations on charts of different assets and in different timeframes for free using the FXOpen TickTrader platform. As a bullish reversal pattern, the Bullish Harami is a great pattern to watch for when the price is on an uptrend. To trade the Bullish Harami candlestick pattern it’s not enough to simply find a pattern with the same shape on your harami candlestick charts. Candlestick Charting Explained Candlestick charts are constructed using the same elements that the traditional bar charts use; however, traders using candlestick charting techniques are more…

It can be bullish (green or white) in an uptrend or bearish (red or black) in a downtrend. The second candlestick is smaller and typically appears within the range of the first one. The best time to trade the Bullish Harami candlestick pattern is when the confirmation candle, usually the third or fourth in the sequence, is nearing its close, signaling the start of an upward trend.