Bullish Harami - Definition, What is Bullish Harami, Advantages of Bullish Harami, and Latest News - ClearTax (2024)

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Bullish Harami - Definition, What is Bullish Harami, Advantages of Bullish Harami, and Latest News - ClearTax? ›

A bullish harami

A Bullish Harami pattern occurs after a downtrend, a long-term trend or a technical rally. The opposite of the Bullish Harami is the Bearish Harami and is found at the top of an uptrend. The Harami candle has an inside bar with a small range.

The psychology behind the Bullish Harami pattern involves a battle between bears and bulls. The small bearish candle reflects the bears' last attempt to push prices lower, but their efforts are thwarted by the larger bullish candle, which signifies the bulls taking control.

The Bullish Harami Cross is the 5^th most reliable candle pattern in our testing, with a win rate of 55.3%. The average Bullish Harami Cross winning trade is 4%, and the average profit across all trades is 0.58%. The Bullish Harami is less reliable, with a lower win rate of 55.2% and a profit per trade of 0.5%.

Three white soldiers and three black crows are also the two most common and most reliable candlestick patterns that can be used for trend reversal. You can use them with strong trend reversal signals as both types of candlestick patterns have the combination of three patterns in a row.

Deciding on trade entry and exit points

The confirmation candlestick which is usually the fourth or third candlestick in the bullish Harami pattern is considered the best time to enter the trade. Investors and traders must aim to enter the trade just before the confirmation candlestick closes to maximize their returns.

Both are candlestick pattern which indicates trend reversal. Bearish harami pattern in uptrend indicates a chances of trend reversal and bullish harami pattern in down trend indicates towards the trend reversal of bearish trend.

A bearish harami is a two bar Japanese candlestick pattern that suggests prices may soon reverse to the downside. An uptrend precedes the formation of a bearish harami. "Rising three methods" is a bullish continuation candlestick pattern that occurs in an uptrend and whose conclusion sees a resumption of that trend.

An inside bar is also similar to a bullish or a bearish harami candlestick pattern. The main difference being that with an inside bar, the highs and lows are considered while the real body is ignored.

What is bullish harami pattern and bearish harami pattern? ›

Like the Bullish Harami, the Bearish Harami pattern includes a small real body, or spinning top, within a long red or green body, which the Japanese call a harami, meaning “pregnant” in their language. However, in the Bearish Harami, the first candle is long, while the second is short.

harami. Noun. (plural haramis) (Islam) A person who has done something haram; a sinner.

To identify a general Harami pattern, look for the following criteria: There is a prevailing trend, whether it's an uptrend or a downtrend. The first candle must continue with the trend's direction. It will be the same color as the current trend, and it will have a long body.

From Arabic حَرَامِيّ (ḥarāmiyy).

Bullish Harami Cross

It is then followed by an upward doji that is fully confined by the previous candlestick. Generally, traders do not act on the pattern alone. Instead, they wait for the next couple of upward trending candles to confirm their belief. It is referred to as “confirmation.”

The bullish harami is a two-day candlestick pattern indicating a prior bearish trend could be reversing. A bullish harami candlestick pattern could signal that a bottom may be close, and that a bullish trend might be taking shape. Period 1 of the pattern features a large bearish session with downward price action.

A bearish harami is a two bar Japanese candlestick pattern that suggests prices may soon reverse to the downside. The pattern consists of a long white candle followed by a small black candle. The opening and closing prices of the second candle must be contained within the body of the first candle.