Harami candle
Also called: Harami, Bullish harami, Bearish harami, Harami cross, Harami mumu
A two-candle pattern where a small body sits inside the previous large body; it shows the move pausing for breath.
4 min read · one puzzle on the page
What is a harami?
A harami is two candles. The first has a large body; the second has a small body that sits entirely inside the first one's body. The word is Japanese for pregnant: the large candle is the mother, the small one inside is the baby.
In the classic definition the second candle is the opposite colour. A small green candle inside a large red one after a decline is a bullish harami; a small red candle inside a large green one after a rally is a bearish harami. When the second candle is a doji, it's called a harami cross.
What it tells you is that the move paused. In the first candle one side pushed price hard. In the second, that side couldn't follow through and price stayed in a narrow space. So a harami shows a breather, not a reversal. It's the opposite of an engulfing pattern: there the second candle swallows the first, here the first contains the second.
How do you spot a harami on a chart?
Look at the bodies. For a bullish harami, say the first candle is red, opening at 1.0900 and closing at 1.0860, a 40-pip body. If the next one opens at 1.0864 and closes at 1.0879, its 15-pip body sits fully inside the first. The smaller the second body relative to the first, the cleaner the pattern.
Wicks aren't part of the definition, but they tell you something. If the second candle's wicks also stay within the first candle's high and low, you have an inside bar too. A harami looks at bodies, an inside bar at the whole range. In practice they often point to the same place.
Then check the location. A bullish harami only means something at known support, at the bottom of a long decline. A bearish harami belongs at resistance, at the top of a sharp rally. A harami that doesn't meet a level is just a small candle after a big one.
Wait for the next candle. In the example above, a close above 1.0880, the second candle's high, shows buyers breaking the pause their way. A stricter read waits for a close above 1.0900, the first candle's open. The logical stop sits a little below the lowest point of the two candles, and the distance from your entry to it is 1R.
Try it on a chart
You don't need to hunt for a single harami here; this chart shows its bigger version: price has been going back and forth in a tight range and neither side can break out of the box. Look at where price stands inside the range and where you could anchor a stop.
Price has been going back and forth in a tight range for a while. Should you do anything?
No sign-up needed. Take a guess; when the chart opens, you'll see why.
The most common harami mistake
Treating it as a reversal signal. After a big red candle, a small green one makes it easy to think you've found the bottom. A harami only says the selling stopped for one candle. Declines pause and carry on all the time, and the second candle is often just a breath.
Paying too much attention to colour. Whether the inner candle is green or red says less than the close that follows it. The real information is which way price leaves the box the two candles drew.
Putting the stop under the small inner candle. Because it's narrow, the stop looks short and tempting. But the first candle's low is still close by, and a small poke there takes you out. The place where the idea is wrong is the far end of both candles.
When does a harami tell you nothing?
In a sideways market. When price chops in a tight range, a small candle after a big one is ordinary. A harami in the middle of a range shows indecision in a place where everyone is already undecided; that's not new information.
Before news, haramis multiply. Ahead of a major release the market waits, candles narrow and small candles line up inside a big one. That pause comes from the calendar, not the structure, and it breaks with the data.
Inside a strong trend a harami is usually just a rest stop. With the higher timeframe still falling, a bullish harami on the 5-minute can become a better entry for sellers. If a strong close in the trend's direction follows, the harami showed you a short break, not a turn.
Frequently asked questions
Is a harami bullish or bearish?
Neither on its own; it says the previous move stopped. A bullish harami at support after a decline shows sellers slowing down. A bearish harami at resistance after a rally shows buyers tiring. The next candle's close decides the direction: look at which side of the two-candle box it closes on.
Is a harami the same as an inside bar?
Close, but not the same. A harami looks at bodies: the second body must sit inside the first body. An inside bar looks at the whole candle: the second candle's high and low must stay within the first one's range. The two often show up together, but one doesn't replace the other. A harami's second candle can wick outside the first. An inside bar's second body can sit in the first candle's wick area rather than inside its body.
What is a harami cross?
A harami whose second candle is a doji. The inner body has shrunk to almost a line, so buyers and sellers ended the second candle level. Some sources treat it as a stronger pause than a plain harami. The same rule still applies: away from a level and without a confirming close, it isn't a reason to trade on its own.
