Harami

Harami is a candlestick pattern used in Japanese candlestick chart analysis. It is a reversal pattern that indicates a potential change in the current trend.

The Harami pattern consists of two candlesticks and has the following characteristics:

1. Large Candle: The first candle is a large candle that represents the continuation of the current trend. It can be a bullish (green) candle in an uptrend or a bearish (red) candle in a downtrend.

2. Small Candle: The second candle is a small candle that is completely engulfed by the body of the first candle. It is typically of the opposite color to the first candle. The small candle has a smaller body and may have upper and lower shadows.

The Harami pattern suggests that the current trend is losing momentum and a potential reversal is possible. The large candle represents the strength and momentum of the trend, while the small candle indicates a weakening of the trend.

To increase the reliability of the Harami pattern, it is important to use other technical analysis tools and indicators. Confirmation indicators or the direction of the next candle can be observed to enhance the reliability of the pattern.

It is important to note that the Harami pattern, like any technical analysis tool, is not always accurate and can produce false signals. Therefore, it should be used in conjunction with other analysis methods and risk management strategies.

The Harami pattern is widely used by traders and investors to identify potential trend reversals and make buying or selling decisions. However, it is always recommended to combine the Harami pattern with other analysis techniques to increase the probability of success.