harami

Harami means impregnated in Japanese, so as you can imagine, there are a lot of double entendres going on in The City when one of these pops up on the screens. The last candlestick body sits inside the previous period´s body. A Harami candlestick formation in a forex chart suggests a trend reversal is afoot. Look out for a body that is shorter and fits within the body of the period before.

The colour of the last body is often the opposite colour to that of the preceding body, although you can have red/red and green/green Harami´s

harami

When a Harami appears, it suggests that the market is losing its "mojo". The 2nd to last candle is often oversized compared to the surrounding candles.

How do you tell a a Bearish Harami from a Bullish Harami? Well, that´s pretty easy, as this is a reversal pattern. If the general trend was down, it´s a Bullish Harami and if you were in a bull market, the formation would be a Bearish Harami.