Japanese Candlesticks Theory

Harami

Previously described patterns have quite strong reversal characteristics, and Harami pattern is used for predicting a flat market. Harami (in Japanese means "pregnant") is a pattern formed with two candles. The second candle with a short real body is placed inside relatively long real body of the prior candle. The long candle is a "mother" and the short candle is her "baby":

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Harami

If in the engulfing patterns candles should be of different colors for Harami it is not a requirement. The only requirement for Harami is that its second candle’s real body must be short and the first candle’s real body must be long. The second candle’s real body must be completely inside the first candle. Size and relative position of the shadows do not matter. The smaller the second real body the better the signal. If the second candle is a Doji then Harami is called a Harami Cross (or a Petrifying Patten). Such a pattern is more significant as it is comprised of an "almighty" doji.

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An example of the Harami pattern

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