Harami and Harami Cross Pattern Explained (real chart examples)

Harami and Harami Cross Pattern Explained (real chart examples)
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The Harami Pattern is a candlestick chart pattern which signals a potential reversal in the market. In this article we will show you how to identify it in the right market position with real chart examples. We also include a link to a free MT4 indicator download.

The Harami Candle Pattern is a two candle pattern which signals a reversal in the market. The Pattern can be Bullish or Bearish depending on where it forms.

Bullish Harami and Harami Cross should be identified as a signal when occurring in a down-trending market or at the bottom of a range. Bearish Harami and Harami Cross should be identified as a signal when occurring in an up-trending market or at the top of a range.

Harami and Harami Cross Candle Pattern Criteria:

  • Bullish Harami: the first candle is a red (bearish) candle.
  • Bearish Harami: the first candle is a green (bullish) candle.
  • The Harami pattern is a small real body which is contained within a prior relatively large real body. ‘Harami’ is an old Japanese word for “pregnant”.
  • The colour of the second candle’s real body is not important.
  • For a Harami Cross, the second candle’s real body is a doji (the open and close price is the same). Read more about Doji Candle Pattern HERE

Additional Notes:

  • Bullish Harami Cross is more significant than Bullish Harami.
  • Bearish Harami Cross is more significant than Bearish Harami.

Quick Reference Guide – Candlestick Basics. If you need a reminder of what candlesticks are have a look at our free PDF – Candlesticks Explained.

The criteria and examples above are just the technical definitions of this pattern. However patterns are only useful with context and with real chart examples.

No pattern will ever exactly match the criteria and in order to be a useful signal must occur in the correct place in a trend. Let’s start by looking at the the classification table for this pattern.

Bullish Harami and Harami Cross Candle Pattern Classification Table

Number of Candles In Pattern 2
Type: (Reversal/Continuation) Reversal
Bullish/Bearish/Indecision Bullish
Market Conditions: Range, Down-trend, Up-trend Down-trend, Ranging
Position: Top, Bottom, Range Bottom

Bearish Harami and Harami Cross Candle Pattern Classification Table

Number of Candles In Pattern 2
Type: (Reversal/Continuation) Reversal
Bullish/Bearish/Indecision Bearish
Market Conditions: Range, Down-trend, Up-trend Up-trend, Ranging
Position: Top, Bottom, Range Top

What Price Action Does The Harami and Harami Cross Pattern Represent?

All candlestick patterns are formed by price action. But the popular ones represent price action that may have significance in signalling the direction of the market.

Bullish Harami and Harami Cross

The Bullish Harami Pattern forms after heavy selling pressure is followed by indecision in the market. This price action forms a relatively large initial red (bearish candle) followed by a candle with a very small or no real body (no real body = Harami Cross).

This indicates that the bear move may have run out of steam and could signal a potential reversal. This is more significant after a sustained down-trend with a final large push down.

Bearish Harami and Harami Cross

The Bearish Harami Pattern forms after heavy buying pressure is followed by indecision in the market. This price action forms a relatively large initial red (bullish candle) followed by a candle with a very small or no real body (no real body = Harami Cross).

This indicates that the bull move may have run out of steam and could signal a potential reversal. This is more significant after a sustained up-trend with a final large push down.

For either of these patterns the signal is more significant if it forms in an area of support (for the Bullish Harami) or resistance (for the Bearish Harami) or with any other form of confirmation.

Hint: It is always good practice to look for confirmation for any signal that you are looking to trade.

Harami Pattern Example With Confirmation

In the example below of the FTSE100, the market was up-trending and a bearish Harami Pattern formed at the top of the trend.

This pattern coincided with an area of resistance as it formed at a round number level. This confirmation can help the trader to feel more confident in the signal and the potential for a good trade.

Harami Pattern Chart Example on a Key Level
Harami Pattern Chart Example on a Key Level

Note: you can get a free round level indicator for MT4 from us here: Round Levels MT4 Indicator.

Harami Cross Pattern Example With Confirmation

In the example below of the FTSE100 the market formed a double top after a move up and then moved down to the level where the initial up move started.

This created a potential range. The market then moved back up and formed a Harami Cross at the top of the range. Following this the market reversed and moved back down.

Harami Cross Pattern Chart Example on a Key Level
Harami Cross Pattern Chart Example on a Key Level

In What Market Conditions Does The Harami and Harami Cross Pattern Become A Signal?

To recap, the Bullish Harami can be seen as a potential signal when forming at the bottom of a down-trend or the bottom of the range. It is preferable to see a sustained down-trend with a final relatively large red (bearish) candle forming the first candle of the Harami Pattern.

The Bearish Harami can be seen as a potential signal when forming at the top of an up-trend or the top of the range. It is preferable to see a sustained up-trend with a final relatively large green (bullish) candle forming the first candle of the Harami Pattern. Let’s look at a couple of real chart examples.

Bullish Harami Candle Pattern In A Ranging Market

A ranging market is one where the price action moves up and down between two sets of support and resistance. This is also known as a sideways, balancing or horizontal market. In essence the price action is struggling to break out of the range decisively either on the upside or downside.

Ranging Market Example
Ranging Market Example

As you can see in this example of the FTSE100 the market was ranging and a Harami Candle Pattern occurred at the bottom of the range with a good example of a large bearish candle forming the first of this two candle pattern.

This signalled the bottom of that leg down. The market reversed and even broke the top of the range and went higher (note this is a weaker signal than when seen in a downtrend).

Bullish Harami Candle Pattern Chart Example in a Ranging Market
Bullish Harami Candle Pattern Chart Example in a Ranging Market

Bullish Harami Pattern In A Down-Trending Market

A down-trending market is one where the price action generally moves down over time and is characterized by lower lows and lower highs.

Down-trending Market Example
Down-trending Market Example

As you can see in this FTSE100 example, the market was down-trending and then the Harami Cross Candle Pattern occurred at the bottom of the trend. The market reversed and went higher.

Bullish Harami Candle Pattern Chart Example in a Down-trending Market
Bullish Harami Candle Pattern Chart Example in a Down-trending Market

Bullish Harami Cross Candle Pattern In A Ranging Market

In this FTSE100 example below, the market had formed a range. The Harami Cross formed at the bottom of the range and the market rallied up and broke the range. 

Bullish Harami Cross Candle Pattern Chart Example in a Ranging Market
Bullish Harami Cross Candle Pattern Chart Example in a Ranging Market

Bullish Harami Cross Candle Pattern In A Down-Trending Market

In this example of the FTSE100, the market was down-trending. A Harami Cross Pattern formed signalling a reversal of the prevailing market trend and started a move up.

Bullish Harami Cross Candle Pattern Chart Example in a Down-trending Market

Bearish Harami Candle Pattern In A Ranging Market

In this US500 market example the market was in a range. The market attempted to break the top of the range with a strong bullish move.

The move failed and formed a Bearish Harami Pattern, the market then reversed and retested the bottom of the range.

Bearish Harami Candle Pattern Chart Example in a Ranging Market
Bearish Harami Candle Pattern Chart Example in a Ranging Market

Bearish Harami Pattern In An Up-Trending Market

In this FTSE100 market example we can see a good example of an uptrend which ends with a final bullish push and a strong green candle.

The Bearish Harami Pattern forms due to the market indecision and the market reverses.

Bearish Harami Candle Pattern Chart Example in an Up-trending Market
Bearish Harami Candle Pattern Chart Example in an Up-trending Market

Bearish Harami Cross Candle Pattern In A Ranging Market

In this FTSE100 example, the market was ranging and the move up was marked by a strong bullish green candle to the top of the range which then formed a Bearish Harami Cross. This confirmed the top and the market moved back down to the bottom of the range.

Bearish Harami Cross Candle Pattern Chart Example in a Ranging Market
Bearish Harami Cross Candle Pattern Chart Example in a Ranging Market

Bearish Harami Cross Pattern In An Up-Trending Market

The example below from the US500 market shows a very good example of a large bullish push in an uptrend which runs out of steam and forms a Bearish Harami Cross.

Bearish Harami Cross Candle Pattern Chart Example in an Up-trending Market
Bearish Harami Cross Candle Pattern Chart Example in an Up-trending Market

Harami and Harami Cross Candle Pattern MT4 Indicator Download (free)

If you trade using MT4 then why not try out our free MT4 indicator? The indicator will scan the market based on the criteria shown in this article and identify them on the chart.

There is also an alternate version which can show the signal in a separate indicator window of the chart if that is your preference.

To download either or both, follow this link: Harami and Harami Cross MT4 Indicator.

Related Candle Pattern Doji Candle Pattern

Important Information About Candlestick Patterns

Attribution:

All of the candlestick patterns that we explain on NothardTrading.com must be attributed to Steve Nison and his books on candle charting, the most famous of which was Japanese Candlestick Charting Techniques (Amazon). You can also find out more at his website here.

Interpretation Of Candle Patterns:

It is important to note that these patterns were originally identified on the daily timeframes of index charts, which is still where they are the most useful. However, this does not mean that they cannot be used for other markets or time frames.

No signal is perfect and should never be used as such. Any patterns that you identify only signals a potential move based on the fact that history repeats itself and forms regular patterns in similar situations.

But past performance is no guarantee of future results! So always treat these patterns with care and think of these guidelines when using them:

Best practice guide for trading of candle patterns:

  • No pattern is ever perfect. Be aware that patterns will form slightly differently each time and in different markets.
  • Use them as consistently as possible. Even though you will never find patterns exactly the same, you should always implement a consistent ruleset when identifying and using patterns.
  • It is never a guarantee, only an indication.
  • Make sure you are using it in the right context. For example if it is a continuation pattern then don’t use it to trade reversals!
  • Use multiple signals (confirmations) to have more confidence in your trading.
Justina Nothard

Justina Nothard

Hi, I’m Justina Nothard, a retail investor trading Stock Index Futures.

I understand how hard it can be for the ordinary trader to learn the basics and find useful tools and practical information.

This is why I decided to create Nothard Trading to help you take control of your trading.

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