A bearish harami is a two-candle pattern that shows up after a rise: a large green candle, then a small red candle whose body sits entirely inside the green body. It tells you buying momentum has stalled. It is a moderate warning, weaker than a bearish engulfing, and most traders wait for a close below the small candle's low before acting.
- Signal
- Bearish reversal
- Candles
- 2
- Look for it
- After an uptrend
- In Alphacent
- Pro library
Spotting a bearish harami candle by candle
Check three things, in this order.
- An uptrend comes first. Price should have been making higher highs and higher lows for a while.
- Candle one is a large bullish body. It should stand out against the candles before it: buyers pushed price well above the open and closed near the high.
- Candle two is a small bearish body that fits inside candle one's body. Its open and close both sit between candle one's open and close. It opens below candle one's close, drifts lower and finishes red.
The rule is about bodies. The second candle's wicks can poke slightly outside the first body and it still counts, as long as the real bodies nest. In the diagram, the second body is roughly a quarter the height of the first, which is a typical proportion.
"Harami" is an old Japanese word for pregnant. The big candle is the mother, and the small one tucked inside it is the baby.
What the small red candle says about the buyers
Candle one is the bulls at full strength. They opened near the low, pushed all session and closed near the high. Anyone watching expects follow-through.
Candle two breaks that expectation. It opens below the prior close, so yesterday's eager demand is missing at the open. Buyers do try: the short upper wick shows a push higher that got sold, and it stalls well short of candle one's high. Then price slides and closes below its own open, with only a small lower wick, so sellers held the session into the close.
Notice what did not happen. Sellers did not drive price back below candle one's open, and they did not erase the rally. The harami is a pause with a bearish tilt, which is why it rates as a moderate signal. A bearish engulfing shows sellers overpowering the whole prior candle. A harami only shows buyers running short of energy.
Where it deserves your attention, and where it doesn't
On its own, a bearish harami often resolves higher. Uptrends pause constantly, and a small red candle after a big green one is one of the most common shapes on any chart. Context and confirmation separate the useful ones from the noise.
It carries more weight when:
- it forms after a long, stretched advance, not two green candles into a move
- it prints at a known resistance level, such as a prior high or a zone where sellers stepped in before (the support and resistance guide shows how to mark these)
- the next candle closes below the harami's low, which is the confirmation most traders wait for
It carries less weight inside a trading range, where small bodies inside large bodies appear all the time and predict nothing. It also means less on the 1-minute chart, where two candles are a couple of minutes of noise. On the 1H and daily charts, each candle covers enough trading for the stall to mean something.
If a later candle closes above candle one's high, the pattern has failed and the uptrend has resumed. Drop the idea.
A hypothetical short on a $2,000 paper account
Everything below is hypothetical, with round prices chosen to keep the arithmetic easy.
Say gold has climbed for two weeks on the daily chart and is pressing against an old high near $4,170. Then:
- Candle one: opens $4,050, closes $4,156, high $4,170.
- Candle two: opens $4,140, closes $4,112, high $4,148, low $4,104. Both the open and the close sit inside candle one's body. That is the harami.
- Candle three: closes at $4,096, below candle two's low of $4,104. That is the confirmation.
You open a short at $4,096. The stop goes just above candle one's high, at $4,176. If price climbs back over the entire pattern, the idea was wrong.
Risk per ounce is $4,176 minus $4,096, which is $80. Risking 1% of $2,000 caps the loss at $20. So the position is $20 divided by $80, or 0.25 ounces, worth $1,024 at entry. No leverage needed.
The nearest support sits around $3,936, which is $160 below entry. Reaching it would make 0.25 times $160, or $40: a 2:1 risk-reward ratio. Getting stopped out costs $20. The position sizing guide walks through this calculation step by step.
Some traders put the stop just above candle two's high instead ($4,152 here). That cuts risk to $56 per ounce and allows a bigger position, but the stop then sits below candle one's high, well within reach of an ordinary bounce. Beginners usually do better with the wider stop and the smaller size.
Mistakes that turn a harami into a losing trade
- Calling any red candle after a green one a harami. If candle one is ordinary in size, or the red body spills outside the green body, it is something else. The first candle should clearly dominate.
- Shorting at the close of candle two. The pattern only says momentum stalled. Entering before price breaks the inside candle's low means betting on a reversal that has not started yet, and plenty of these resolve higher.
- Ignoring the bigger trend. A harami at the bottom of a shallow pullback in a strong uptrend is usually just a breather before the next leg up.
- Having no exit plan. Failure is quick and easy to see: a close above candle one's high. Set that exit before you enter.
Harami, engulfing or inside bar
Four patterns sit close enough to this one to cause mix-ups.
Bearish engulfing flips the geometry. The small green candle comes first and a big red body swallows it whole. Sellers wiped out the entire prior session's body, which is why it is generally the stronger signal.
An inside bar is measured on the full range, wicks included: the second candle's high and low both sit within the first candle's high and low. Many haramis are also inside bars, but a harami whose wick pokes out is not. Inside bars have no color rule either.
The harami cross is a variant where the second candle is a doji, with almost no body at all. Many traders treat it as a slightly stronger stall, since the indecision is total.
The bullish harami is the same idea turned upside down: a big red candle in a downtrend with a small green body inside it.
To train your eye, open gold or Bitcoin on the daily chart in Alphacent's simulator and find three haramis in the past few months. For each one, note whether the next candle closed below the small candle's low, and what price did after.
Worked examples on this page use a hypothetical paper account and are for learning only, not advice. In Alphacent, free trades use a fixed $1,000 size; choosing your size, stop-loss and take-profit orders, and leverage are Pro features.
Questions people ask
Does the second candle of a bearish harami have to be red?
The standard version, and the one on this page, has a red second candle. Some traditional sources accept either color as long as the small body sits inside the first, arguing that the stall matters more than the color. The red version is the stronger read, because sellers won that session's close.
How reliable is the bearish harami pattern?
No single hit rate holds across markets and timeframes, so be wary of any page that quotes one. Treat it as a moderate warning whose value depends on where it forms and whether the next candle confirms it. Without that confirmation, it resolves higher often enough that trading it alone is a weak bet.
What usually happens after a bearish harami?
One of three things. Price breaks below the small candle's low and a pullback or reversal follows. Price drifts sideways while the market decides. Or buyers return and push above the first candle's high, which cancels the pattern. You only know which one after the fact, so plan for all three.