11 January 2021
Glossary
Bullish harami
Bullish harami

A bullish harami pattern is a reversal pattern that appears at the bottom of a downtrend. It consists of a bearish candle with a large body, followed by a bullish candle with a small body, completely within the range of the body of the red candle.

A bullish harami pattern is a reversal pattern that appears at the bottom of a downtrend. It consists of a bearish candle with a large body, followed by a bullish candle with a small body, completely within the range of the body of the red candle. The second candlestick signals a possible change in momentum, it opens around the middle of the range of the previous candlestick.
The color of the Doji candlestick (black, green, red) does not matter, because the candle itself, appearing at the bottom of a downtrend, gives a strong bullish signal. This bullish harami cross provides an attractive risk/reward ratio because the bullish move (if confirmed) is just beginning.
Stops can be placed below the new low and traders can enter the market at the opening of a candle following a bullish harami pattern. Since, in theory, harami appears at the beginning of an uptrend, traders can use multiple target levels to maximize profits from the entire uptrend range. These targets can be located at the latest support and resistance levels.
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