Technical Glossary / Candlestick Patterns
Harami Pattern
A large candle followed by a smaller candle whose body sits inside the prior body.
Teaching sketch. It shows the shape, not a live quote and not a trade signal.
Definition
Harami means pregnant in Japanese. The first candle is the large range. The second body is contained inside it. The pattern is a contraction: the second period could not extend the first period's conviction. A bullish harami follows a down candle. A bearish harami follows an up candle.
How to identify it
Two bodies. The second open and close both lie within the first open and close. Wicks may stick out. If the second body is a doji, the pattern is a harami cross.
Bullish reading
After a decline, a small up body inside a large down body says the selling paused. Confirmation is a later close above the first candle's high, not the small candle alone.
Bearish reading
After a rally, a small down body inside a large up body says the buying paused. Confirmation is a later close under the first candle's low.
Common mistakes
Treating the harami as a completed reversal. It is a stall. Inside bars are the range version of the same idea.
Limitations
Inside bodies are frequent. Without a prior trend and a level, the pattern is ordinary consolidation.
This note explains the term. A sketch shows the shape of the idea. Neither is a recommendation, a signal, or a comment on any security. Indicator settings and exchange conventions differ. Check the live chart and the contract specification before you use a number.