“Harami” means “pregnant” in Japanese — the small candle is “inside” the larger one, like a child within its mother. A fitting name for a pattern about contained, diminishing energy.
What is a Harami?
The Harami is a two-candle pattern where a small candle forms entirely within the body of the previous large candle. The first candle is large and represents the continuation of the existing trend. The second candle is small — its open and close both fall within the range of the first candle’s body.
The key message: momentum is slowing. The large candle showed conviction. The small candle shows that conviction evaporating. The trend may not be over yet, but it’s losing steam.
Bullish vs. Bearish Harami
Bullish Harami
Large red candle followed by a small green candle inside its body. After a downtrend — selling momentum is drying up, a bounce may be coming.
Bearish Harami
Large green candle followed by a small red candle inside its body. After an uptrend — buying momentum is fading, a pullback may be coming.
Harami vs. Harami Cross
A Harami Cross is a stronger version of the pattern where the second candle is a Doji (open and close are equal) rather than a small-bodied candle. The Doji inside the large candle’s body indicates even greater indecision and is considered a more powerful signal than a standard Harami.
How to Trade the Harami
- ✓ Treat the Harami as a warning signal, not an immediate entry — always wait for confirmation.
- ✓ For a Bullish Harami: wait for the third candle to close green above the small candle’s high before entering long.
- ✓ For a Bearish Harami: wait for the third candle to close red below the small candle’s low before entering short.
- ✓ Most reliable at key support/resistance levels or after an extended trend.
- ✓ A Harami Cross (Doji as second candle) is a stronger signal than a standard Harami.
- ✗ Don’t enter on the Harami candle itself — the small body is indecision, not direction.
- ✗ Avoid in choppy, trendless markets where small candles inside large ones are common noise.
Key difference from Engulfing: In an Engulfing pattern, the second candle engulfs the first — it’s aggressive and decisive. In a Harami, the second candle is contained by the first — it’s cautious and uncertain. The Harami says “maybe.” The Engulfing says “definitely.”