The candles of the pattern are ringed. An invented chart, drawn to show the shape. Not market data.
Also searched asbullish harami · bearish harami · harami cross
How to recognise a harami
- A large body, then a small one inside it.
- The two are opposite in colour.
- After a fall it is a bullish harami; after a rise, a bearish one.
What it is taken to mean
It is read as momentum fading: the second period could not extend the first. It is considered a weaker hint than an engulfing pattern, which is its opposite.
What traders check next
- The candle that follows. Traders usually want a third candle to agree.
- Whether there is a level nearby that would explain the pause.
- Whether the second candle is a doji (a harami cross), which is given a little more weight.
Where people go wrong
- Acting on the two candles alone.
- Mixing it up with the inside bar, which compares wicks as well.
- Reading it against a strong, orderly trend.
Questions people ask
- What is a harami cross?
- A harami whose second candle is a doji.
- Is a harami a reversal signal?
- No. It describes what buyers and sellers did during those candles. Studies of candlestick patterns find that, taken alone, they predict the next move only a little better than chance, if at all. It is one observation to weigh with others.
The words on this page
An explanation for study. It is not advice, a recommendation or a forecast, and a pattern or a situation described here says nothing certain about what a price will do next.