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A Harami looks like this: two candles—the first is large, the second is small, and the entire body of the small candle fits inside the body of the large one. It’s the exact opposite of the Engulfing pattern from the last episode: in an Engulfing pattern, the large candle swallows the small one; in a Harami, the small one hides inside the large one. The name comes from the word “pregnant.”
How does it form? The first candle still belongs to the prevailing trend: in a bullish Harami, it starts with a large bearish candle, with the bears still attacking hard. But the second candle only manages a small move inside the belly of the large bearish candle. Both sides are hesitating, and volume shrinks too—the momentum is contracting, not reversing.
Location determines what it means: a bullish Harami at the end of a downtrend leans bullish; a bearish Harami at the end of an uptrend leans bearish. If it appears in the middle of a sideways market, don’t force the pattern onto it.
Wait for the next candle to confirm: it only counts if it closes in the reversal direction and volume picks up too. If the price keeps moving with the original trend and breaks below (or above) the first candle’s extreme, the setup is invalid. Note: a Harami is much weaker than an Engulfing pattern. It’s just “catching its breath,” not a guarantee of a reversal.
The rule of thumb: Big candle embraces small candle; check the location before the candles. Patterns show probabilities, not predictions.
Have you spotted a Harami? Share a chart in the comments and see if you can recognize one.
$BTC $ETH $BNB
A Harami looks like this: two candles—the first is large, the second is small, and the entire body of the small candle fits inside the body of the large one. It’s the exact opposite of the Engulfing pattern from the last episode: in an Engulfing pattern, the large candle swallows the small one; in a Harami, the small one hides inside the large one. The name comes from the word “pregnant.”
How does it form? The first candle still belongs to the prevailing trend: in a bullish Harami, it starts with a large bearish candle, with the bears still attacking hard. But the second candle only manages a small move inside the belly of the large bearish candle. Both sides are hesitating, and volume shrinks too—the momentum is contracting, not reversing.
Location determines what it means: a bullish Harami at the end of a downtrend leans bullish; a bearish Harami at the end of an uptrend leans bearish. If it appears in the middle of a sideways market, don’t force the pattern onto it.
Wait for the next candle to confirm: it only counts if it closes in the reversal direction and volume picks up too. If the price keeps moving with the original trend and breaks below (or above) the first candle’s extreme, the setup is invalid. Note: a Harami is much weaker than an Engulfing pattern. It’s just “catching its breath,” not a guarantee of a reversal.
The rule of thumb: Big candle embraces small candle; check the location before the candles. Patterns show probabilities, not predictions.
Have you spotted a Harami? Share a chart in the comments and see if you can recognize one.
$BTC $ETH $BNB