If you've ever tried to understand the mysterious world of Japanese candlestick charts, you've probably come across a pattern called "Harami". Not only does it sound like an exotic dish from a Japanese restaurant, but it's also an important tool for anyone who wants to succeed in trading. Today, we'll figure out what the Harami candlestick pattern is, how to recognize it, and how to use it in your trading strategy. Read on the site more about bearish harami

What is the Harami pattern?

Harami means "pregnant" in Japanese, and this name perfectly describes the visual appearance of this pattern. It consists of two candles: the first is large, and the second is much smaller and is located inside the body of the first. In essence, the smaller candle is "inside" the larger one - hence the analogy with pregnancy.

How to recognize Harami on a chart?

To identify Harami on a chart, you need to look for two things:

- The first candle is large and strong. It can be either bullish (white or green) or bearish (black or red). This candle sets the tone for the current trend.

- The second candle is smaller and fits entirely within the body of the first candle. It can be any color, but it is important that it is noticeably smaller than the first.

Types of Harami Patterns

There are two main types of Harami patterns:

Bullish Harami**: appears after a downtrend and signals a possible uptrend. The first candle is bearish, and the second is bullish.

Bearish Harami**: appears after an uptrend and indicates a possible downtrend. The first candle is bullish, and the second is bearish.

How to use the Harami pattern?

Now the fun part: how to apply this knowledge in practice? Here are some tips:

- Signal confirmation: Do not rely on just one pattern to make trading decisions. Look for confirmation from other indicators or patterns.

- Market context: Consider the overall market context. If you see a bullish Harami in a global bearish trend, be careful - the market may simply take a break before continuing to fall.

- Support and resistance levels: Pay attention to the support and resistance levels near the Harami pattern. They can strengthen the reversal signal.

- Timeframe: The higher the timeframe, the stronger the signal from the Harami pattern. On daily charts, it will be more significant than on minute charts.

Conclusion

The Harami candlestick pattern is one of many tools in a trader's arsenal that helps make more informed decisions. Understanding its structure and the ability to correctly interpret the signals can significantly increase your chances of success in trading. But remember: no model guarantees 100% results, so always use a comprehensive approach to market analysis!