The Harami pattern is a reversal
pattern that signals an exausting dowtrend or a rally that is losoing
steam. The Harami candlestick formation is comprised the first
candle has a long body while the second candle has a smaller body
that is within the first candle. Tipically the smaller of the second
candle the stronger the price reversal signal. The smaller the wicks
of the second candle the more accurate the signal. If the second
candle hovers near the top of the first candle during an up trend
this indicates that there is a higher probability for consolidation
than a reversal. The same is true in a downtrend, wihch is if the
second candle hovers nears the bottom of the first candle, it
indicates a higher probability for consolidation as opposed to a
reversal.
In Picture we see a bearish Harami
reversal where a large white candle is followed by a small dark one.
the Harami is a good example of an “inside” day where the price
action of today is completely inside the price range of the prior
day.
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| Candlestick Harami pattern |
Harami pattern quiz
Harami Candlestic Pattern Quiz
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