Two candle, reversal warning

Harami

The Harami is a two-candle pattern where a small candle is fully contained within the prior large candle's body. Reflects loss of momentum and signals potential reversal. Weaker on its own than other reversal patterns.

Direction-context dependent

Bias

Weak alone, moderate with confirmation

Reliability

Trend exhaustion warning

Best context

4H, Daily, Weekly

Timeframe

What is the Harami?

Harami means 'pregnant' in Japanese — the visual of a large candle 'carrying' a small candle inside it. Two candles:

Candle 1: A long candle in the direction of the trend (bearish in downtrends; bullish in uptrends). Candle 2: A small candle whose body is fully contained within Candle 1's body.

The pattern signals that the trend is losing momentum — the second session couldn't even extend the prior session's range. Weaker than Engulfing patterns because it shows indecision, not aggressive directional shift.

How to identify a Harami

Requirements:

1. Candle 1 is long and in the direction of the existing trend. 2. Candle 2's body fits entirely inside Candle 1's body (wicks can extend outside). 3. Candle 2 should be visibly smaller (most traders require Candle 2 to be at most 60% of Candle 1's body).

Body color: Candle 2 typically opposite-colored from Candle 1 (bullish Harami: bearish Candle 1 + bullish Candle 2). Same-color Haramis are weaker. A Harami Cross (Candle 2 is a Doji) is the strongest variant.

How to trade the Harami

The Harami alone is a warning, not a trade signal. Confirmation is essential.

Bullish Harami at downtrend bottom: Wait for a third candle to close above the Harami's high. Enter long; stop below the Harami low. Same logic inverted for bearish Haramis.

Harami Cross: A Doji Candle 2 inside a long Candle 1 is the strongest version. Treat with more weight than a regular Harami.

Skip Haramis in mid-range or without horizontal level confluence. Without context, the Harami's signal is too weak to be tradeable.

More patterns and definitions in the forex glossary, or see them stacked on real charts in the trading blog.

Harami FAQ

What does "Harami" mean?

"Pregnant" in Japanese — referring to the visual of a small candle being "carried" inside the prior large candle's body, like a pregnancy.

How is Harami different from Inside Bar?

Mechanically identical — both are small candles fully contained within the prior candle's range. Harami emphasizes body containment (and reversal context); Inside Bar uses the full range (high to low). Most practitioners use the terms interchangeably.

What is a Harami Cross?

A variant where Candle 2 is a Doji (open and close virtually equal). The complete indecision plus prior trending move makes this the strongest Harami variant.

Why is Harami weaker than Engulfing?

Harami shows that momentum stopped (Candle 2 inside Candle 1). Engulfing shows that momentum reversed (Candle 2 fully covers Candle 1). The latter is a much stronger directional commitment by the counter-trend side.

Does Harami require confirmation?

Yes. Without a follow-up candle closing in the direction of the implied reversal, ~50% of Haramis fail to produce reversals. Confirmation is essential for tradeable signals.

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