Master IB Exness High Level Briliant - 90% Rebate Exness automatic transfer to account trading every day!!

Select you Language

List of Countries with the Largest Exness Trading Volume in the World

Exness Vietname Exness China Exness Thailand Exness India Exness Japan Exness Indonesia Exness Pakistan Exness UEA XM Philippines
Exness Algeria, Exness Angola, Exness Antigua and Barbuda, Exness Argentina, Exness Armenia, Exness Aruba, Exness Azerbaijan, Exness Bahrain, Exness Bangladesh, Exness Belize, Exness Benin, Exness Bhutan, Exness Bolivia, Exness Botswana, Exness Brazil, Exness Brunei, Exness Burkina Faso, Exness Burundi, Exness Cambodia, Exness Cameroon, Exness Cape Verde, Exness Chad, Exness Chile, Exness China, Exness Colombia, Exness Comoros, Exness Costa Rica, Exness Djibouti, Exness Dominica, Exness Dominican Republic, Exness East Timor, Exness Ecuador, Exness Egypt, Exness El Salvador, Exness Equatorial Guinea, Exness Eritrea, Exness Ethiopia, Exness Gabon, Exness Gambia, Exness Georgia, Exness Ghana, Exness Grenada, Exness Guatemala, Exness Guernsey, Exness Guinea, Exness GuineaBissau, Exness Guyana, Exness Honduras, Exness Hong Kong, Exness India, Exness Indonesia, Exness Isle of Man, Exness Jamaica, Exness Japan, Exness Jersey, Exness Jordan, Exness Kazakhstan, Exness Kenya, Exness Kuwait, Exness Kyrgyzstan, Exness Laos, Exness Lebanon, Exness Lesotho, Exness Liberia, Exness Libya, Exness Macau, Exness Madagascar, Exness Malawi, Exness Maldives, Exness Mauritania, Exness Mexico, Exness Moldova, Exness Mongolia, Exness Montenegro, Exness Montserrat, Exness Morocco, Exness Mozambique, Exness Namibia, Exness Nauru, Exness Nepal, Exness Niger, Exness Nigeria, Exness Oman, Exness Pakistan, Exness Panama, Exness Papua New Guinea, Exness Paraguay, Exness Peru, Exness Philippines, Exness Qatar, Exness Republic of the Congo, Exness Rwanda, Exness Saint Kitts and Nevis, Exness Saint Lucia, Exness Sao Tome and Principe, Exness Saudi Arabia, Exness Senegal, Exness Serbia, Exness Sierra Leone, Exness Solomon Islands, Exness South Africa, Exness Sri Lanka, Exness Suriname, Exness Swaziland, Exness Taiwan, Exness Tajikistan, Exness Tanzania, Exness Thailand, Exness Togo, Exness Tonga, Exness Trinidad and Tobago, Exness Tunisia, Exness Turkey, Exness Turkmenistan, Exness Uganda, Exness United Arab Emirates, Exness Uzbekistan, Exness Venezuela, Exness Vietnam, Exness Zambia, Exness Zimbabwe

Learning the Famous Harami Candlestick Pattern

Harami is a candlestick pattern consisting of two candlesticks, where the body of the second candlestick is smaller and falls within the range of the body of the first candlestick. The term "Harami" in Japanese means "pregnant," illustrating how the second candlestick seems to be "wrapped" within the body of the first one.

The Harami pattern can signal potential changes in market direction. There are two types of Harami that traders commonly monitor: Bullish Harami and Bearish Harami.

Types of Harami

  1. Bullish Harami

    • Formation: It occurs after a downtrend, starting with a large bearish (red) candlestick, followed by a smaller bullish (green) candlestick that resides within the body of the first.
    • Meaning: Indicates a potential reversal from a downtrend to an uptrend. The second candlestick suggests that the downward momentum may be losing strength.
    • Confirmation: Traders typically wait for a third candlestick to confirm the upward price movement before acting on the bullish signal.
  2. Bearish Harami

    • Formation: It appears after an uptrend, starting with a large bullish (green) candlestick, followed by a smaller bearish (red) candlestick that is within the body of the first.
    • Meaning: Indicates a potential reversal from an uptrend to a downtrend. The second candlestick shows that the upward momentum might be weakening.
    • Confirmation: Traders usually wait for a third candlestick to validate the downward price movement before acting on the bearish signal.

Application in Trading

  1. Timeframe and Validity:

    • Daily Timeframe (D1): For more valid signals from the Harami pattern, it is advisable to use the daily timeframe. This timeframe provides a clearer picture and stronger signals.
    • H4 Timeframe: After understanding the Harami pattern, traders can utilize the 4-hour (H4) timeframe for trading. This timeframe is also useful for confirming signals from patterns formed in higher timeframes.
    • Lower Timeframes: Avoid using timeframes lower than H4, as candlestick patterns may form too frequently, potentially generating false signals.
  2. Support and Resistance:

    • Bullish Harami: Its accuracy increases if the pattern forms near or at a support area, indicating that prices may rise after hitting the support level.
    • Bearish Harami: Its accuracy improves if the pattern forms near or at a resistance area, suggesting that prices may drop after touching the resistance level.
  3. Stop Loss Placement:

    • Bullish Harami: Place the stop loss a few pips below the lower shadow of the first candlestick. This protects against potential price movements that go against your position.
    • Bearish Harami: Place the stop loss a few pips above the upper shadow of the first candlestick. This helps avoid losses if the price moves against your bearish position.
  4. Example Cases:

    • Bullish Harami: Suppose the first candlestick (bearish) has touched the support area, followed by the second candlestick (bullish) forming a Bullish Harami. Traders might wait for confirmation from the third candlestick before entering a buy position or use a pending order around the upper shadow of the second candlestick.
    • Bearish Harami: If the first candlestick (bullish) has touched the resistance area, followed by the second candlestick (bearish) forming a Bearish Harami, traders may wait for confirmation from the third candlestick before entering a sell position or use a pending order around the lower shadow of the second candlestick.

Visualizing the Harami Pattern

  • Bullish Harami:
    • The first candlestick (bearish) is large, followed by a smaller candlestick (bullish) within the body of the first candlestick.
  • Bearish Harami:
    • The first candlestick (bullish) is large, followed by a smaller candlestick (bearish) within the body of the first candlestick.

The Harami candlestick pattern is a valuable technical analysis tool for identifying potential trend reversals. By understanding both Bullish and Bearish Harami formations and their practical applications in trading, you can enhance your ability to read market movements and make more informed trading decisions. Always ensure you use an appropriate timeframe and consider support and resistance levels in your analysis.

Share:

Popular Posts