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  • eur/usd 1.1862

    0.18

    BTC/usd 15.674.99

    8.60

    ETH/usd 674.99

    13.60

  • eur/usd 1.1862

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    BTC/usd 15.674.99

    4.78

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    11.37

Trading Using The Harami Candlestic Patterns

Candlestick Patterns

5 Main candlestick patterns

What is a Harami Candlestick Pattern

The candlestick pattern comprises of two candles which indicates a potential reversal or continuation in the market, the word ‘Harami’ is derived from the Japanese word for ‘pregnant’ which is the main reason why it is sometimes called a Japanese candle. The shape of the pattern looks like a pregnant women and it indicates a bullish or a bearish move which is likely to take place.

Bullish Japanese candle

A bullish Harami is a candlestick chart indicator suggesting that a bearish trend may be coming to end. Some investors may look at a bullish harami as a good sign that they should enter a long position on an asset

  1. Confirmed downtrend
  2. Leading larger bearish (red) candle, followed by a smaller bullish green candle – price gaps up after bearish candle and is contained within the open and close of the leading bearish candle

Bearish Japanese candle

A bearish Harami is a two bar Japanese candlestick pattern that suggests prices may soon reverse to the downside. The pattern is made up of a long blue or green candle followed by a small red candle.

  1. Confirmed uptrend
  2. Leading larger bullish (green) candle, followed by a smaller bearish red candle – price gaps down after bullish candle and is contained within the open and close of the leading bullish candle

The confirming candle in the pattern is used as a tool to tell traders if the smaller trailing gives life to a reversal or follows the trend with the starting candle. The popularity of the Harami pattern and other candlestick patterns is due to the ability to catch a reversal at the most opportune time with tight risk. This will allow traders to have very favorable risk reward ratio.

Advantages of the pattern

  • Because of its shape it is easy to identify it in the complex market
  • You can maximize on the long swing trades as per the indication with reduced risk
  • It has been proved to give accurate indications by many expert traders

Disadvantages of the pattern

  • It requires due diligence in analysis before application

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