A harami is a two-candle reversal pattern built on one simple picture: a large candle moving with the trend, then a small candle whose body sits entirely inside the body of the first.
Chart Analysis guide
Harami Candlestick Pattern: Bullish, Bearish, and the Harami Cross Explained
chart analysis12 min read
A harami is a two-candle reversal pattern built on one simple picture: a large candle moving with the trend, then a small candle whose body sits entirely inside the body of the first.
12 min read
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The name is the Japanese word for "pregnant," and traders read the pair that way, calling the big candle the mother and the small one the child. The message is momentum loss: after a wide trending candle, price opened inside the previous range and went almost nowhere.
A harami at the bottom of a downtrend is a bullish harami, where sellers failed to follow through; at the top of an uptrend it is a bearish harami, where buyers ran out of steam. When the child is a doji, the pattern becomes a harami cross, generally read as a stronger version.
This guide assumes you can already tell a body from a wick; if candle anatomy is still new, start with how to read candlesticks and come back. What follows is the whole harami family, plus the comparison that makes it click: how it mirrors the engulfing candle.
The two-candle structure: mother and child
Two candles make a harami, each with a distinct job.
- The mother candle is large and moves with the trend, wide red in a downtrend or wide green in an uptrend, showing the trend still at full strength.
- The child candle is small, often a spinning top or a doji, and its real body fits completely inside the mother's. Its color matters less than its size: the point is that almost nothing happened.
What exactly has to be inside is where the textbooks differ, and the spectrum is worth knowing. The classic rule concerns real bodies only: the child's open and close both sit within the mother's open-to-close range, and the wicks may poke out.
Stricter traders require the whole child, wicks included, to stay inside the mother's body, which shades into the price-action idea of an inside bar. The stricter the rule, the rarer and cleaner the pattern; the looser it is, the more haramis you spot and the more noise you accept.
There is no single correct convention, so pick one and check which a source is using before trusting its claims.
Some US-stock definitions also add a gap, with the child opening away from the mother's close, but that is a session-market detail: in forex and crypto, which trade around the clock, gaps are rare and nobody requires one.
Finelo's guide to candlestick reversal patterns in forex covers how classic patterns adapt to continuous markets.
The bullish harami
Where it forms: at the bottom of a downtrend, ideally after an extended decline or into support.
What it looks like: a wide red mother candle, with sellers still dominant, followed by a small child candle, often green, tucked inside the mother's body.
What it suggests: the selling that produced the mother candle failed to follow through. Price opened inside the previous body rather than sliding further, and stayed there all session. Nobody has taken control yet, but the sellers who had been winning just posted their weakest session of the trend. That first hesitation is what a bottom tends to look like early, which is why traders watch the bullish harami alongside patterns like the morning star.
The bearish harami
Where it forms: at the top of an uptrend, ideally after an extended rally or into resistance.
What it looks like: a wide green mother candle, with buyers in full control, followed by a small child, often red, contained inside the mother's body.
What it suggests: the rally is running low on fuel. After a session of aggressive buying, the market opened inside the previous range and stalled. Buyers did not retreat, but they stopped advancing, and in a trend, failing to advance is the first sign of weakness. The bearish harami belongs to the same top-watching family as the evening star and the hanging man.
The harami cross
When the child is a doji, with its open and close nearly identical, the pattern is a harami cross. A doji is the purest picture of indecision a chart can print, so one arriving right after a wide trending candle is a sharper contrast than an ordinary small body: full commitment one session, complete stalemate the next.
For that reason the harami cross is generally read as a somewhat stronger reversal signal than a standard harami, though it still needs confirmation. A bullish harami cross forms at downtrend bottoms and a bearish one at uptrend tops.
The psychology: why a tiny candle is information
It seems odd that the smallest candle on the screen can carry a message, but that is the harami's whole logic. Trends run on momentum, and each wide candle recruits more participants who expect the next one to be just as wide.
The child candle is a public failure of follow-through. The side that was winning had every advantage and produced nothing with it, like a sprinter breaking stride mid-race. Most stumbles recover, but every fall starts with one, so the harami reads best as an alert to watch the next candle closely rather than a signal on its own.
How to spot a harami: a checklist
- A real trend to reverse. Several candles running one direction, or a clear push into support or resistance; a harami inside a sideways range means little.
- A wide mother candle in the trend's direction. The wider it is, the more the stall that follows stands out. - A small child whose body sits fully inside the mother's, using your chosen wick rule, and clearly smaller than the mother, since the pattern's meaning lives in that contrast. - Supporting context. At a level, after an extended run, or with stretched momentum, the stall carries more weight.
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Confirmation and invalidation
Confirmation and invalidation are both read off the candles that follow the harami:
- Bullish harami: many traders wait for a following candle to close above the child's high, or above the whole pattern's high, before treating a reversal as underway. Rising volume on that candle strengthens the case.
- Bearish harami: the mirror image, a following candle closing below the child's low or the pattern's low. - Invalidation: if price instead drives through the mother candle's extreme, below its low in a bullish setup or above its high in a bearish one, the pause has resolved as continuation and the signal is dead.
The harami names a pause; only the next candle can name a reversal. Traders who act on a confirmed harami frame their risk around the mother candle's extreme, but that is risk management discipline rather than a property of the pattern, and confirmation improves the odds without ever assuring the outcome.
Harami vs engulfing: the inverse twins
The harami has an exact structural opposite in the engulfing candle: both are two-candle reversals, but which candle does the containing is flipped.
| Feature | Harami | Engulfing pattern |
|---|---|---|
| First candle | Large, in the trend direction | Small, in the trend direction |
| Second candle | Small body contained inside the first body | Large body that covers the first body |
| Common interpretation | Momentum paused; confirmation is needed | Momentum may have reversed; confirmation still helps |
| Bullish form | Small body inside a large bearish body near a decline | Large bullish body covers a smaller bearish body |
| Bearish form | Small body inside a large bullish body near an advance | Large bearish body covers a smaller bullish body |
In an engulfing pattern the opposing side takes over in one decisive bar; in a harami the winning side simply stops. Engulfing carries its own evidence of reversal where the harami carries only evidence of a pause, so confirmation matters even more here.
Worked examples
A bullish harami, start to finish. A stock has fallen for two weeks on the daily chart. Monday prints another wide red candle, the downtrend at full force. Tuesday opens inside Monday's body, drifts in a narrow band, and closes slightly green, a small child fully contained by Monday's body and sitting at a support zone. That is the harami, an alert rather than a signal. Wednesday opens firm and closes above Tuesday's high on improving volume: confirmation, and only now does the pattern read as a possible bottom. Had Wednesday broken below Monday's low instead, the downtrend would simply have resumed and the harami would be void.
A bearish harami, compressed. An uptrending market prints a wide green candle into a resistance level, then a small red candle inside its body, with buyers stalling exactly where sellers have defended before. The next candle closes below the pattern's low, a confirmed bearish harami and a warning to trend-followers that the easy stretch of the rally may be over.
Limitations: a pause is not a prediction
The harami is common, modest, and easy to over-read. An honest summary keeps four things in view.
- Most pauses are just pauses. Trends rest constantly and small inside candles appear all the time, many resolving as continuation. Without a trend filter and confirmation, the harami is more noise than signal.
- It is a pause pattern rather than proof that the opposing side has taken control.
- No dependable universal win rate exists. Published figures vary with market, timeframe, definition, and testing method, so this guide quotes none.
- Timeframe and market context affect how often small inside bodies occur. Any claim that one timeframe is categorically superior requires a defined test and dataset.
Practice before you risk anything
If you are still learning to read these patterns, do not start on a live chart with real money. Collect examples first: haramis that marked real turns, haramis that led nowhere, and inside candles that meant nothing. Note the trend, the level, and what confirmation would have looked like. That habit separates a real signal from chart noise.
To place the harami in the wider family, study it against its inverse in the engulfing candle guide, then map the rest with the candlestick patterns cheat sheet and how to read stock charts for beginners.
Inside the Finelo app, you can study candlestick structure and practice buy, sell, and hold decisions on real market data with virtual funds. There are no deposits, no withdrawals, and no broker connection, it is a closed practice loop, so the only cost of a wrong read is the lesson. To go deeper, Finelo publishes educational material for beginners, and you can check Finelo reviews, the About Finelo page, or the Finelo support center.
Final decisions are always yours. A pattern sharpens how you think; it does not think for you.
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FAQ
Is a harami candlestick bullish or bearish? Either one, because context decides. A harami after a downtrend is bullish, since sellers failed to follow through, and a harami after an uptrend is bearish, since buyers stalled. The structure is identical in both cases: a small candle whose body sits entirely inside the prior large candle's body.
What does "harami" mean? It is the Japanese word for "pregnant." The large first candle, the mother, appears to carry the small second candle, the child, inside its body, so the name describes the shape literally. Steve Nison introduced the term to Western traders in his work on Japanese candlestick charting.
What is a harami cross? It is a harami whose child candle is a doji, a candle with almost no body. Because a doji is the strongest picture of indecision, the harami cross is generally read as a somewhat stronger reversal signal than a standard harami. It still needs confirmation. See our doji guide for more.
What is the difference between a harami and an engulfing pattern? They are containment inverses. In a harami the second candle is small and sits inside the first candle's body, a stall. In an engulfing pattern the second candle is large and swallows the first, a counterattack. Both are two-candle reversals, but engulfing is the more forceful signal. See our engulfing candle guide.
Do the wicks have to be inside the mother candle? It depends on the school. The classic definition only requires the child's body to sit inside the mother's body, while stricter traders want the wicks inside too, which also makes it an inside bar. Stricter definitions produce rarer but cleaner patterns, so pick one convention and apply it consistently.
How reliable is the harami pattern? On its own, not very, because it signals a pause and most pauses resolve as continuation. Its usefulness comes from context, meaning a real trend, a nearby level, and stretched momentum, plus confirmation from a close beyond the pattern. There is no trustworthy universal win rate, so treat any exact percentage with skepticism.
Sources and Further Verification
- CME Group: Technical Analysis Education
- CFA Institute Research and Policy Center
- Finelo App: official product information
Terms used in discretionary technical-analysis communities are not regulator-defined signals and do not have universally validated predictive power.
Chart AnalysisHarami Candlestick PatternBeginner
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