In this article, We learn about "Harami".Let's Go!
The Harami pattern consists of two candlesticks, the first candlestick is a large candlestick and the second candlestick is a small candlestick whose body is contained within the body of the first candle.
Harami means "conception" or "pregnancy" in Japanese.
The first candlestick is considered the "mother", with its massive entity completely surrounding or embodying the smaller second candlestick, creating the appearance of a pregnant mother.
The second candlestick may appear as a spinning top or a doji.
The Breed Candlestick pattern comes in two different forms:
- Bullish Pregnancy : Bullish reversal pattern (occurs after a downtrend).
- Bearish Pregnancy: Bearish reversal pattern (occurs after an uptrend).
Accreditation standards
To identify the general maternity form, look for the following criteria:
- There is a general trend, whether it is an upward trend or a downward trend.
- The first candle must continue the trend direction. The color will be the same as the popular colors now, and the figure will be very long.
- The second candle must be contained within the body of the first candle (so it opens and closes within the body of the first candle). It can be any color and its body will be smaller. Only the body needs to be contained within the first candle; the wick does not matter.
Bulls are brewing
- The price has established a downward trend.
- The first candle is a big bearish candle.
- The second candle is the smaller bullish candle.
- When the second candle opens, the price gaps after the first candle, but its body is contained within the body of the first candle.
Bearish Pregnant Women
- The price has established an upward trend.
- The first candle is a big bullish candle.
- The second candle is the smaller bearish candle.
- When the second candle opens, the price gapps downward after the first candle, but its body is contained within the body of the first candle.
meaning
Harami is a trend reversal pattern that must occur within an existing trend.
The color of the second candlestick does not matter. Usually, the second candle has the opposite color to the first candle, but not always.
What matters is the position of the harami within the existing trend and the direction of that trend.
This should be seen in the context of the chart.
If a gestation occurs at or near a support, resistance, or trend line, it becomes even more important.
When gestation appears in an uptrend, it is a bearish signal.
When it occurs in a downtrend, it is a bullish signal.
The appearance of the fetus and the short real body of the second candle is a signal that the indecision and uncertainty following a sudden surge in trend movement is causing the trend to lose momentum.
In an uptrend, this means that buyers failed to follow the surge in activity and closed the second candle at or near the high of the previous candle.
The first bullish candle indicates that the current downtrend is continuing and bears are pushing the price lower.
However, bulls then stepped in and the price opened higher than the previous candle’s close. The bulls are now in control and the price is rising.
In a downtrend, this means that the sellers failed to close the second candlestick near the low of the previous candlestick.
The first bearish candle indicates that the current uptrend is continuing and bulls are pushing the price higher.
However, the bears then stepped in and the price opened lower than the previous candle’s close. The bulls took profits and exited before the price closed lower.
In both cases, this weakness suggests that a trend reversal may be imminent.
To analyze a specific harami candle, observe the following:
- The longer the candle, the stronger the reversal.
- In a bullish trend, the higher the second candle closes on the black candlestick, the greater the likelihood of a reversal.
- In a bearish gestation, the lower the second candle closes on the white candlestick, the greater the likelihood of a reversal.
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