Harami

A harami is a two candle pattern where a large candle is followed by a small candle whose body sits entirely inside the first candle's body. The name comes from an old Japanese word for pregnant, because the small candle looks like it is carried inside the larger one. A harami signals that the strong move of the first candle has stalled. A bullish harami forms after a decline; a bearish harami forms after a rise.

The rules#

When the second candle is a doji, the pattern is called a harami cross, considered a slightly stronger sign of indecision. See Doji.

What a harami tells you#

The first candle shows strong momentum. The second candle shows that momentum stopped: price opened inside the previous body and stayed contained, with neither side able to push to new ground. The harami is the opposite shape of an engulfing pattern, and it is generally a weaker signal: it shows hesitation rather than a decisive takeover. See Engulfing Patterns.

Harami and inside bars#

Western traders call a candle whose entire range (wicks included) sits inside the previous candle's range an inside bar. A harami only requires the body to be inside. Inside bars are widely used as compression signals: a break above or below the mother candle's range often starts the next move. See Compression and Expansion.

Confirmation is essential#

Because the harami shows only a pause, it frequently resolves in the original direction. Traders typically wait for:

• A close beyond the first candle's midpoint or body in the new direction, or
• A break of the harami candle's high (bullish) or low (bearish) on the next candle.

Location adds weight: a bullish harami at a strong support level, or a bearish harami at resistance after an extended rally, is more meaningful.

Trading the pattern#

1. Identify a harami after a clear move into a key level.
2. Wait for confirmation in the reversal direction.
3. Enter on the confirmation close or on the break of the pattern's range.
4. Stop beyond the first candle's extreme, or beyond the harami's range for a tighter, riskier stop.
5. Target the next opposing level.

Another approach is to trade the break of the whole pattern in either direction, treating it as a compression setup rather than a reversal.

Common mistakes#

• Treating a harami as a strong reversal signal without confirmation.
• Ignoring trend strength: in strong trends, harami are often brief pauses before continuation.
• Trading every harami in a choppy range.

Frequently asked questions#

What is a bullish harami?#

A two candle pattern after a decline where a small candle's body is contained within the previous large red candle's body, suggesting selling pressure is easing.

Is a harami a reliable reversal pattern?#

It is weaker than engulfing or star patterns and usually needs confirmation from the following candle.

What is a harami cross?#

A harami in which the second candle is a doji, showing even sharper indecision after a strong move.

Next, learn double rejection patterns: Tweezer Tops and Bottoms.