Price ActionBeginner

Harami

A harami is a two-candle pattern where a small body sits completely inside the body of the large candle before it. After a decline it hints at a bullish reversal, after a rally at a bearish one, and it usually needs confirmation from the next candle.

A strong move produces a big candle — then the next session goes almost nowhere. That sudden hesitation is what a harami captures. The name is Japanese for "pregnant": the small second candle sits inside the first like a baby. This entry explains how to spot bullish and bearish harami, what they mean and how traders confirm them.

Category
Price Action
Reading time
4 min
Also called
Harami pattern, Bullish harami, Bearish harami
Updated

The harami in plain words

A harami has two candles: the first with a large body, the second with a small body fully contained within the first.1

Every harami looks the same; whether it is bullish or bearish depends on the trend before it — after a decline it is a potential bullish reversal, after an advance a potential bearish one.2

It is best treated as an early warning to watch for confirmation rather than a direct entry signal.3

How to trade a harami, step by step

  1. Check the trend

    A reversal pattern needs a trend to reverse. See Trend.

  2. Spot the large candle

    A long body in the direction of the trend.

  3. Spot the small candle

    Its body fits inside the first body.

  4. Wait for confirmation

    The next candle should move in the new direction.

  5. Place a stop

    Beyond the large candle's extreme. See Stop Loss.

  6. Check the location

    Stronger at support or resistance. See Support and Resistance.

Worked examples

Example 1 — Bullish harami

Possible bottom

After a decline, day 1 opens at $50 and closes at $45. Day 2 opens at $46 and closes at $47.50.

Example 1 — Bullish harami — calculation
Day 1 body$45–$50 (bearish)
Day 2 body$46–$47.50, inside day 1

After a decline, a small body inside a large one is a potential bullish reversal.1

Example 2 — Confirmed trade

2 : 1 setup

Day 3 closes at $49, above day 2. You buy at $49 with a stop at $44.50 and a target of $58.

Example 2 — Confirmed trade — calculation
Risk$49 − $44.50 = $4.50
Reward$58 − $49 = $9
Reward-to-risk2 : 1

Confirmation the following day, such as a further advance, is what turns a harami into a signal.1

Example 3 — Bearish harami

Possible top

After a rally, a long white candle from $80 to $88 is followed by a small black candle from $86 to $85.

Example 3 — Bearish harami — calculation
Day 1 body$80–$88 (bullish)
Day 2 body$85–$86, inside day 1

After an advance, the same shape suggests that buying pressure is fading.3

Harami vs engulfing

AspectHaramiEngulfing
Second candleSmall, inside the firstLarge, wraps the first
MessageMomentum slowsMomentum flips
StrengthWeaker, needs confirmationStronger
See alsoHarami cross (doji)Engulfing Pattern

How traders use the harami

  • Early reversal warning

    A pause after a strong move.

  • At support or resistance

    Adds weight to key levels.

  • Taking profits

    A bearish harami can prompt trimming longs. See Profit Taking.

  • With indicators

    Combine with momentum or volume. See Relative Strength Index.

Advantages and disadvantages

Advantages

  • Easy to recognise.
  • Common, so it appears often.
  • Works in any market and time frame.

Disadvantages

  • A weak signal on its own.
  • Needs confirmation, which costs part of the move.
  • Frequent false signals in choppy markets.

Going deeper

Read as far as you need. Each level builds on the one before it.

What the name means

Beginner

"Harami" is Japanese for pregnant, describing the small candle sitting inside the larger one.3

Colour combinations

Intermediate

Any colour combination can form a harami, though Steve Nison suggests bullish harami are strongest when the first candle is white — and white-first combinations are rarer after a decline.1

Reversal or continuation

Advanced

A harami can also mark a pause before the trend resumes, which is why it is read as a possible reversal or continuation depending on what follows.4 See Continuation.

Common mistakes

  1. Ignoring the trend

    Without a prior trend there is nothing to reverse.

  2. Trading without confirmation

    Many harami fail.

  3. Checking shadows instead of bodies

    The bodies define the pattern.

  4. Stops too tight

    Place them beyond the large candle.

Check your understanding

Test yourself before moving on. Each answer comes with an explanation.

Q1Day 1 body $30–$36, day 2 body $32–$34. Is it a harami?
Q2What decides whether a harami is bullish or bearish?

Key points to remember

  1. A harami is a small body inside a large prior body.
  2. After a decline it is potentially bullish; after a rally bearish.
  3. It signals slowing momentum, not a confirmed reversal.
  4. Wait for confirmation from the next candle.
  5. It works best at key levels.

Frequently asked questions

What is a harami cross?

A harami whose second candle is a doji, showing even stronger indecision.

Is a harami reliable?

On its own it is a modest signal; confirmation and location improve it.

Do the shadows have to fit inside?

The classic rule focuses on the bodies; shadows may extend beyond.

Further learning

Sources

This article is written in our own words. The sources below support the specific facts, rules and figures marked with a number in the text. Links open the original publisher’s page.

  1. StockCharts ChartSchool. Candlestick Bullish Reversal Patterns (opens in a new tab) Checked .
  2. StockCharts ChartSchool. Candlestick Bearish Reversal Patterns (opens in a new tab) Checked .
  3. IG. 16 Candlestick Patterns Every Trader Should Know (opens in a new tab) Checked .
  4. Corporate Finance Institute. Candlestick Patterns (opens in a new tab) Checked .

Read more elsewhere

Educational content, not financial advice. Examples use hypothetical prices and simplified costs; actual fees, margin rules and regulations vary by broker, market and country. Trading Metrics is our sister site, under the same ownership; we are not affiliated with any other publisher linked above. Last reviewed . Report an error or request a source credit.