🔍 What is a Harami Pattern?
The Harami candlestick pattern is a 2-candle reversal or indecision pattern where a small candle forms inside the body of a larger previous candle.
👉 The word Harami means “pregnant” in Japanese, referring to the smaller candle being inside the larger candle’s body.
This pattern signals that the current trend is losing momentum and a reversal or pause may occur.
🟢 Bullish Harami
📈 Structure
- 🔴 Large bearish candle during a downtrend
- 🟢 Small bullish candle completely inside the previous candle’s body
👉 Indicates selling pressure is weakening and buyers may take control.
🔴 Bearish Harami
📉 Structure
- 🟢 Large bullish candle during an uptrend
- 🔴 Small bearish candle completely inside the previous candle’s body
👉 Indicates buying momentum is slowing and sellers may enter.
💡 Psychology Behind the Harami Pattern
The Harami reflects a loss of momentum in the current trend:
- First candle shows strong trend dominance
- Second small candle shows hesitation and reduced momentum
- Market begins entering an indecision phase
👉 This often signals a possible trend reversal or temporary pause.
✅ How to Trade the Harami Pattern
🔹 Step-by-Step Strategy:
- Identify Existing Trend
- Downtrend → Bullish Harami
- Uptrend → Bearish Harami
- Spot the Inside Candle
The second candle must stay inside the first candle’s body. - Wait for Confirmation
Next candle should confirm reversal direction. - Entry Point
- Buy above bullish confirmation candle
- Sell below bearish confirmation candle
- Stop Loss
Place beyond the first candle’s high/low. - Target
Use support/resistance or trend reversal targets.
⚠️ Common Mistakes to Avoid
- ❌ Trading without confirmation
- ❌ Ignoring trend direction
- ❌ Confusing with Inside Bar pattern
- ❌ Using in sideways markets
🔗 Harami vs Engulfing Pattern
| Pattern | Structure | Signal Strength |
|---|---|---|
| Harami | Small candle inside large candle | Moderate |
| Engulfing Pattern | Large candle engulfs previous candle | Strong |
👉 Harami shows weakening momentum, while engulfing patterns show aggressive reversal.
🚀 Pro Tips for Better Accuracy
- Combine with Support & Resistance Zones
- Use RSI divergence for confirmation
- Watch for volume changes
- Trade with higher timeframe analysis
The Harami pattern is an important signal that the current trend may be slowing down. While it does not guarantee a reversal, it provides an early warning of possible market change.
👉 Always wait for confirmation before entering trades.