Bullish Harami Candlestick Pattern

The Bullish Harami is a bullish reversal pattern that signals a possible trend change from bearish to bullish. It consists of two candles and typically appears at the bottom of a downtrend.

Structure of the Bullish Harami Pattern:

1. First Candle (Bearish):

• A longred (bearish) candle, confirming the ongoing downtrend.

2. Second Candle (Bullish Inside Bar):

• A small green (bullish) candle that forms inside the first candle’s body.

• The second candle’s open and close are within the range of the first candle.

• This suggests that selling pressure is weakening, and buyers may be stepping in.

Key Characteristics:

✅ The second candle is much smaller than the first and is completely inside its body.

✅ Stronger when appearing at a key support level.

✅ Indicates a possible shift in momentum from bearish to bullish.

Psychology Behind the Pattern:

• The first bearish candle shows strong selling pressure.

• The second smaller candle inside it suggests indecision and buyer interest.

• This signals that the trend may be reversing, as sellers are losing momentum.

Trading Strategy:

📌 Entry: After confirmation with the next bullish candle closing above the second candle.

📌 Stop-loss: Below the low of the first candle.

📌 Target: Next resistance level or based on a risk-reward ratio (e.g., 1:2).

Since the Bullish Harami is a weaker reversal signal compared to the Bullish Engulfing, traders often wait for additional confirmation (like volume increase or a break above resistance).