Bullish Harami Candlestick Pattern

A bullish harami is a two-candle pattern that forms after a decline: a large red candle, then a small green candle whose body fits entirely inside the red candle's body. It shows selling momentum has stalled. Buyers have not taken over yet, so treat it as a reason to watch closely and wait for price to break above the small candle's high before acting.

Signal

Bullish reversal

Candles

2

Look for it

After a downtrend

In Alphacent

Pro library

The small candle carried inside the big one

Harami is Japanese for pregnant. Picture the first candle as the mother and the second as the child carried inside her body, and you have the shape.

To call it a bullish harami, check four things in order:

1. A real downtrend comes first. Several lower highs and lower lows (a proper trend), not one bad session.
2. Candle one is large and bearish. A long red body that closes near its low.
3. Candle two is small and bullish. Its body, from open to close, sits entirely inside the first candle's body.
4. The size gap is obvious. The second body should look small next to the first, not just a little shorter.

The wicks matter less. In the strict version, both wicks of the second candle also stay inside the first body, as they do in the diagram. Most chartists only require the bodies to nest.

One practical wrinkle: markets that trade around the clock, such as Bitcoin, usually open each candle at the previous close. The small green body then starts right at the bottom edge of the red body instead of floating inside it. Many traders still count it, as long as the second body is small and stays well under the first candle's open.

What the second candle says about sellers

Candle one is sellers at full strength. They push price down all session and close near the low.

Then the follow-through doesn't come. The second session opens above that close, never makes a meaningful new low, and finishes higher than it opened. Buyers showed up, but they only nudged price. They did not reclaim the ground lost the day before.

So the message is narrow: momentum stalled. A stall is not a reversal. Price often pauses inside a downtrend and then keeps falling, and a harami on its own cannot tell you which one you are watching. The smaller the second body relative to the first, the more it reads as hesitation rather than buying pressure.

Harami, engulfing or inside bar?

All three compare one candle to the one before it. What differs is what gets compared, and which candle is bigger.

• Bullish engulfing is the harami flipped. The second green body is larger and swallows the whole red body. Buyers did more than stop the selling. They took back the entire prior body, which is why engulfing is generally treated as the stronger of the two.
• Inside bar compares full ranges, high to low, instead of bodies, and color does not matter. A strict harami, wicks included, is also an inside bar. Plenty of inside bars are not haramis, though, and traders read them as compression before a breakout in either direction.
• Bearish harami is the mirror image: a large green candle at the top of an uptrend, then a small red body inside it.

Quick rule: second body bigger, engulfing. Second body smaller, harami. Measuring wick to wick, inside bar.

Where it earns attention, and where it doesn't

A harami is a probabilistic hint, never a guarantee. Context decides most of its value.

It deserves a closer look when:

• It forms after a sustained decline, not a single down day.
• It sits on a level buyers have defended before. Read up on support and resistance if that idea is new.
• The next candle closes above the high of the small inside candle.

It tends to fail when:

• Nobody waits for confirmation. Without a breakout candle, many haramis resolve lower as the downtrend picks up again after a pause.
• Price is chopping sideways. Inside a range, small bodies inside big bodies appear all the time and mean very little.
• The timeframe is tiny. On a 1m chart the shape shows up every few minutes. On a 1D chart each one represents a full day of trading and carries more weight.

For practice with nothing on the line, open gold on the 1D chart in Alphacent's simulator and note every harami you spot over the next few weeks. Mark which ones got a confirmation candle and which rolled over.

A hypothetical silver trade on a $2,000 account

This example is invented to show the arithmetic. It is not a recommendation.

Silver has fallen for three weeks on the daily chart and is approaching $28.00, a level where it bounced twice before. On Monday a large red candle opens at $30.00, trades down to $28.00 and closes at $28.20. On Tuesday a small green candle opens at $28.50, dips to $28.40, rises to $29.30 and closes at $29.10. Its body ($28.50 to $29.10) sits well inside Monday's body ($28.20 to $30.00). That is a bullish harami at support.

You wait. On Wednesday price closes at $29.40, above Tuesday's $29.30 high. That is the confirmation, and you buy at $29.40.

Now the risk:

1. Stop: just below the whole pattern's low of $28.00, at $27.90. If price gets there, the harami idea is wrong.
2. Risk per ounce: $29.40 minus $27.90 is $1.50.
3. Risk per trade: 1% of $2,000 is $20.
4. Position size: $20 divided by $1.50 is 13.3, so round down to 13 ounces.
5. Check: 13 ounces at $29.40 is a $382.20 position. If the stop-loss is hit, you lose 13 times $1.50, which is $19.50. Just under your $20 limit.

A tighter stop under Tuesday's $28.40 low would let you buy more ounces, but it sits inside the kind of noise that forms right after a reversal attempt. The position sizing guide walks through that tradeoff in more detail.

Mistakes that turn a harami into a loss

Calling every small green candle after a red one a harami. Was there a downtrend, was the first candle genuinely large, and does the second body really fit inside? Most false sightings fail one of those.

Buying at the close of the second candle. This is the classic harami trap. You are paying for a reversal that has not happened yet, and if the downtrend resumes you are stuck near the top of a pause.

Ignoring the bigger chart. A harami on the 1H chart means little if the 1D chart is falling hard toward no obvious support. Check one timeframe up before trusting it.

Skipping the stop because the pattern "looks clean". Clean patterns fail too. Decide where you are wrong before you enter, then size the position from that distance, not from how confident you feel.

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