If you have ever looked into the world of Japanese candlestick charts, you have probably come across such a mysterious pattern as "Harami". But what kind of beast is this and how to eat it? Let's figure it out together! Read on the site more about bearish harami candle

What is a Harami candlestick pattern?

The name "Harami" comes from the Japanese word meaning "pregnant". And this is no coincidence! Imagine a large candle - this is the "mother", and inside it, like a baby, a small candle is comfortably settled. This is exactly what this pattern looks like on the chart.

The Harami pattern consists of two candles:
- The first candle is large and strong, indicating the continuation of the current trend.
- The second candle is smaller in size and is located inside the body of the first. It symbolizes a potential reversal or weakening of the trend.

How to recognize Harami on a chart?

Recognizing Harami is easy if you know a few simple rules:
- The first candle should be significantly larger than the second.
- The body of the second candle must be completely within the body of the first.
- The pattern can be either bullish (downward reversal) or bearish (upward reversal).

Bullish Harami
When a long black (bearish) candle is followed by a small white (bullish) candle, this is a signal that the downtrend may be about to reverse.

Bearish Harami
On the contrary, if a long white (bullish) candle is followed by a small black (bearish), the market may be preparing for a decline.

How to understand the signals of the Harami pattern?

Now that we have learned how to recognize Harami, it is important to understand what it is telling us. This pattern signals a possible change in market sentiment. If the trend has been moving in one direction for a long time, the appearance of Harami may indicate indecision and a possible reversal.

However, do not perceive this pattern as a 100% guarantee of a reversal. It is important to remember: the market is full of surprises! Therefore, it is always worth confirming signals with additional indicators or volume analysis.

How to Use the Harami Pattern in Trading?

Here are some tips for using the Harami pattern in your trading strategy:

- Confirmation: Use other technical indicators to confirm the signal. For example, moving averages or RSI can help confirm the market's intentions.

- Risk management: Don't forget about stop losses! Even the most reliable models sometimes fail.

- Context is important: Always consider the overall market context and fundamental factors. The Harami pattern works best when combined with other forms of analysis.

- Practice, practice: The more you watch the market and test your hypotheses in practice, the better you will become at recognizing such patterns intuitively.

In conclusion, although Japanese candlesticks may seem complicated to beginners, they offer powerful tools for understanding market sentiment. The Harami pattern is just one of many ways to see hidden signals on the charts. So grab your magnifying glass and go explore these mysterious figures! Happy trading!