- Start trading with $1
- Earn up to 95% profits
- Fast payments
- $10 minimum deposit
- $10 minimum withdrawal
Share this
What is the Harami Reversal Candlestick Pattern?
The Harami reversal candlestick pattern is a two-candlestick trend reversal setup.
Harami in Japanese means ‘pregnant’. It takes this name because it resembles an expectant mother.
The pattern is made of first the mother candlestick with a larger body, then the child with a smaller body.
- Start trading with $1
- Earn up to 95% profits
- Fast payments
- $10 minimum deposit
- $10 minimum withdrawal
The focus is usually on the bodies of the two candlesticks which make up the pattern.
The body of the baby must be entirely engulfed by the body of the mother bar preceding it.
Difference between a bullish and a bearish Harami pattern.
A bullish Harami reversal candlestick pattern is made up of first a long-bodied bearish bar, then a bullish short-bodied bar.
- Start trading with $1
- Earn up to 95% profits
- Fast payments
- $10 minimum deposit
- $10 minimum withdrawal
The body of the second bar must be entirely within the body of the first bar.
A bearish Harami reversal candlestick pattern, on the other hand, is made up of first a long-bodied bullish bar, then a bearish short-bodied bar.
The body of the second bar must also entirely be within the body of the first bar.
The Principle behind the Harami Reversal Candlestick Pattern.
The principle behind the Harami reversal candlestick pattern is simple.
- Start trading with $1
- Earn up to 95% profits
- Fast payments
- $10 minimum deposit
- $10 minimum withdrawal
Basically, the move from a long to a short body is significant of volatility contraction.
While the price was moving with a huge momentum in the direction of the trend, it experienced a sudden volatility contraction.
This must-have slowed down the price momentum in the direction of the trend, hence sounding a looming reversal of the incumbent trend.
Ideally, that’s the best summary of the Harami reversal candlestick pattern that you will find on the internet.
Note; the dynamism with which to trade the pattern has been changing from time to time.
- Start trading with $1
- Earn up to 95% profits
- Fast payments
- $10 minimum deposit
- $10 minimum withdrawal
In this post, I will show you how to trade the Harami reversal candlestick pattern in 2021. Saddle tight and let us explore this together.
Trading the Harami Reversal Candlestick Pattern in 2021.
-
Set Up the Indicators.
The only indicator required for this strategy is the Moving Average Convergence and Divergence (MACD).
I know you are wondering what MACD is doing here because you are not used to trading the Harami reversal candlestick pattern with the MACD.
Well, remember I am teaching you how to trade the Harami Reversal Candlestick in 2021, so new stuff is inevitable.
Click on the indicators’ tab and choose MACD from the list.
Apply it in its default settings and your chart will be ready for the next step.
Remember your chart must be in the Japanese candlestick form though.
-
Establish the Market Trend.
You must first know which direction the market is trending towards, in order to draw trend channels, which is the next step.
Use price action in this step to establish the market trend.
Price action is simply what the price is doing.
- Start trading with $1
- Earn up to 95% profits
- Fast payments
- $10 minimum deposit
- $10 minimum withdrawal
Is it forming higher highs, higher lows, lower lows, lower highs, or what exactly is the price doing?
If the price forms higher highs and higher lows, then it is trending upwards.
On the other hand, if the price forms lower highs and lower lows, it is then trending downwards.
The market may also be trending sideways.
This is where the market is neither trending upwards nor downwards but oscillates up and down within certain levels.
So which of the three cases is your market trending?
Take note of it, then proceed to the next step.
-
Draw Trend Channels.
The trend channels you draw in this step are with respect to the kind of market trend you established in the previous step.
In the previous step, there were three possible outcomes – upwards trending market, downwards trending market, or sideways trending market.
In this step, you will use trend and horizontal lines to draw the trend channels of the market trends.
- Start trading with $1
- Earn up to 95% profits
- Fast payments
- $10 minimum deposit
- $10 minimum withdrawal
Did you get an upwards trending market in step 2?
Then it means the market was forming higher highs and higher lows.
Use a trend line to join the major lows of the price and another trend line to join the major highs of the price.
You will get an upward sloping trend channel for the uptrend.
Did you, on the other hand, get a downwards trending market in step 2?
Then it means that the market was forming lower highs and lower lows.
Use a trend line to join the major highs of the price and another trend line to join the major lows of the price.
You will get a downwards sloping trend channel for the downtrend.
Well, was your market trending sideways?
Then it means that it was forming highs at almost the same level and lows at almost the same level.
- Start trading with $1
- Earn up to 95% profits
- Fast payments
- $10 minimum deposit
- $10 minimum withdrawal
That gives an impression that the rising price would reverse downwards at almost the same level almost every other time.
The falling price would also reverse upwards at almost the same level almost every other time.
In the above case, use a horizontal line to join the major highs of the price and another horizontal line to join the major lows of the price.
You will get a horizontal channel for the sideways trend.
-
Spot the Harami Reversal Candlestick Pattern.
Have you drawn the trend channels for the respective market trends?
If yes, then you can proceed to scan trading signals.
Trading signals in this case are the Harami reversal candlestick patterns.
Here are the specifications of the Harami reversal candlestick patterns you expect in relation to the trend channels:
- Upwards sloping trend channel on an uptrend: Towards the end of the uptrend, expect a bearish Harami reversal candlestick pattern at the upper limit of the channel.
- Downwards sloping trend channel on a downtrend: Towards the end of the downtrend, expect a bullish Harami reversal candlestick pattern at the lower limit of the channel.
- Horizontal trend channel on a sideways trend: At the upper limit of the channel, expect a bearish Harami reversal candlestick pattern. However, at the lower limit of the channel, expect a bullish Harami reversal candlestick pattern.
A reminder of how bullish and bearish Harami reversal candlestick patterns look like will do no harm, or will it?
Here you go:
- Start trading with $1
- Earn up to 95% profits
- Fast payments
- $10 minimum deposit
- $10 minimum withdrawal
- Bullish Harami reversal candlestick pattern: First, there must be a downtrend.
After the trend has been running for some time, a long-bodied bearish candlestick must appear, followed by a short-bodied bullish candlestick.
The body of the second candlestick of the pattern must be entirely within the body of the first candlestick.
- Bearish Harami reversal candlestick pattern: First, there must be an uptrend.
After the trend has been running for some time, a long-bodied bullish candlestick must appear, followed by a short-bodied bearish candlestick.
The body of the second candlestick of the pattern must be entirely within the body of the first candlestick.
-
Confirm the Signal with MACD.
Do you remember applying the MACD indicator on the chart as the very first step?
It was in this step where you would use the MACD indicator you applied on your chart.
Having a Harami reversal candlestick pattern signal is not enough.
You need further confirmation from an indicator.
Remember we have always said that candlestick patterns are not exhaustive on their own, so they cannot solely be used to make trading decisions.
- Start trading with $1
- Earn up to 95% profits
- Fast payments
- $10 minimum deposit
- $10 minimum withdrawal
They need to be used in conjunction with other trading tools such as indicators.
Here is how to confirm the Harami reversal candlestick pattern signals obtained from the previous step:
- Bearish Harami reversal candlestick pattern on the upper limit of the upwards sloping channel must be followed by a bearish MACD divergence.
A bearish MACD divergence is where the MACD will be forming lower highs as the price is forming higher highs.
- Bullish Harami reversal candlestick pattern on the lower limit of the downwards sloping channel must be followed by a bullish MACD divergence.
A bullish MACD divergence is where the MACD will be forming higher lows as the price forms lower lows.
- Bearish Harami reversal candlestick pattern on the upper limit of the horizontal channel should be followed by a bearish MACD divergence.
- Bullish Harami reversal candlestick pattern on the lower limit of the horizontal channel should be followed by a bullish MACD divergence.
-
Set Up Buy Stop or Sell Stop Pending Order.
Set up a buy stop pending order at the high of the second bar of a confirmed bullish Harami reversal candlestick pattern.
On the other hand, set up a sell stop pending order at the low of the second bar of a confirmed bearish Harami reversal candlestick pattern.
-
Adjust Stop Loss and Take Profit.
Place the Stop Loss for the buy order at the low of the bar on whose high you placed the buy order.
On the flip side, place the Stop Loss for the sell order at the high of the bar on whose low you placed the sell order.
Perfect Harami reversal candlestick patterns should show urgency in price move in the direction of the reversal.
The Take Profit for your orders needs to be at the opposite extreme of the channel.
- Start trading with $1
- Earn up to 95% profits
- Fast payments
- $10 minimum deposit
- $10 minimum withdrawal
Take the profit for your buy order just below the upper limit of the channel. For the sell order, take the profit just above the lower limit of the channel.
Also Read: – HOW TO SET UP AND TRADE THE ICHIMOKU KINKO HYO METHOD IN OLYMP TRADE.
Wrapping Up.
As we conclude, I would like to state that conditions may not perfectly occur as I have described.
The price might break beyond the drawn channel and create a seemingly parallel channel along the initial channel.
If that happens, you can introduce other trend lines parallel and in the equal distance as the first limits of the channel, called sliding parallels.
The extra line you introduce will just widen the initial channel and you can continue trading as the initial rules state.
All in all, this is how to trade the pattern.
I’m sure there is new stuff you have not been applying in trading the candlestick pattern.
You may also not have even heard about it. And, this guide has given you all you need to know to trade successfully.
Proceed to trade the pattern like a pro as you grow your trading account in 2021.
Happy Trading!
Share this
- Start trading with $1
- Earn up to 95% profits
- Fast payments
- $10 minimum deposit
- $10 minimum withdrawal
Recent Posts
You Will Become Rich Quickly if You Live in One of These 6 Countries.
Where in the world is it easiest to become rich? While so many people think that to become rich you’ve got to live, work, and do business in Iceland, Sweden, ….
You Can Make $274 if you Invest $100 Ten Times With a Winning Rate of 70%
Quite so often we receive WhatsApp texts or even telegram messages of traders asking, “how much will I make if I invest $100 in Olymp Trade?” While it is easy ….
XM Seminars for 2020 | Register a Real Trading Account to Book Seat
XM Global Ltd operating under the business trading name XM is a securities service provider licensee regulated and authorized by the International Financial service commission (IFSC) in Belize under the ….
XM MT4 | How to Make Money Trading Forex on Your Smartphone
Did you just register for a Forex trading account – which by the way, you hope to use to make so much money online but are still stuck wondering what ….
XM Global vs Olymp Trade | Which Broker to Join?
XM Global vs Olymp Trade, which broker should you sign up for? The real question should be, between Forex trading and Fixed Time Trading, what’s best for a beginner? Tell ….
XM Global No Deposit Bonus Forex! XM Forex $30 Bonus
COLWMA (City of London Wealth Management Awards) winner of Best FX Service Provider 2023, XM Forex is one of the best Forex brokers with a no deposit bonus globally. The ….
XM Forex: How Does Forex Trading Work?
To understand how Forex trading works, we must first understand what Forex is. And what is Forex you ask? Forex, also known as foreign exchange or FX, is the global ….
XM Forex Bonus $30 – How to Start Forex Trading Without Money
One of the reasons why most new traders fail to go past the demo account is the fear of losing money trading on a real account. But what if I ….
XM Forex 10th Anniversary Promo | Up to $1,000,000 to be Won in Prizes
Hey there,Do you want to raise so much money so fast for Christmas? How much do you wish to raise?Ksh. 50,000, €1,000, ₽2,000, ₹4,000,… or $10,000?Well, if your budget falls ….
XM Broker: Why is Forex Trading Popular?
There are so many reasons why people trade Forex. Some of these reasons also double up as the advantages or benefits of Forex trading. And what are these benefits you ….
Broker Comparison
Top 5 Binary Options Brokers With $10,000 Demo Account
Binary options trading is fast becoming popular in the world and with this popularity the urge and to find the best broker to trade with. But when we talk of ….
Tips to Becoming a Forex Millionaire in Kenya
Most people in Kenya have turned to forex trading to earn an extra coin. To start trading forex though, you need to have an account that will hold your money ….
SabioTrade: Get Funded and Withdraw up to 80% Profits
Are you looking for a way to trade Forex with a funded account and withdraw up to 80% of your profits? If so, you might be interested in SabioTrade, a ….
Quotex vs Olymp Trade. Which Broker to Sign up With?
Quotex vs Olymp Trade which broker should you sign up with? This is a common question that we get all the time, especially from newbie traders who want to sign ….
Quotex Broker Regulation Vs Olymp Trade Regulation
Quotex Broker is a binary options broker that offers access to its trading platform globally to traders who’d like to make money trading in shorter time frames. Just like Quotex, ….
Nigeria Forex Millionaires And Their Forex Strategies
Forex trading has spread to several parts of the world and is legal in Nigeria, and Africa. However, it operates within a gray area. Subsequently, the Central Bank of Nigeria ….
Is Qx Broker Among The Best Binary Options Brokers
Binary trading is one of the easiest and safest ways to trade online. It is also the fastest-growing form of investing. Binary trading is one of the easiest ways to ….
IQCent Broker Review With User Opinion, Legit or Scam?
Do you want to start trading with IQcent and don’t know if to trust them or not? Welcome to our comprehensive review of IQCent, the online trading platform that has ….
IQ Mining Review Plus Users Opinion. Legit or Scam?
IQ Mining is a dual-purpose platform, serving as both a cloud mining hub for cryptocurrencies and a broker for Forex and binary options trading. Its efficient utilization of smart contracts ….
Forex Millionaires in South Africa and How they Make Money
Last week, we started a new series of listicles on this blog. Our objective? To explore, discuss, and reveal the faces of forex millionaires in the countries where forex is ….
Business Ideas
What is the Best Business to Start in Kenya?
Kenya is a great place to start a business. The best type of business may be different for you, depending on your skill set and what you are looking for ….
What Business Ideas Make The Most Money
Are you an aspiring business entrepreneur? Check out our list of the most popular business ideas in 2024. People venture into the business world for different reasons. Some because they ….
What Business Can I Start With 2k In Kenya In 2024?
Kenya is a great place to start a business. The economy is growing, the population is young and there is a lot of opportunity for entrepreneurs. However, starting a business ….
Top Business Ideas that Will Make 375 SAR Daily in Saudi Arabia in 2024.
It is common knowledge that Saudi Arabia is the world’s greatest oil producer. Around 25% of the world’s petroleum reserves are processed in the country. According to statistics, Saudi Arabia’s ….
Top 50 Online Shopping Sites in India.
You must have found yourself ordering a thing or two from an online store and they delivered to your preferred address, right? Now that is the new fashion of doing ….
Top 50 Most Profitable Businesses in Kenya
Ain’t it not easy to say I want to start a business in 2024? Of course not. You have to do your due diligence: come up with a business idea, ….
Top 50 business ideas for All Ages {Online and Offline Ideas}
Many people desire to venture into entrepreneurship for different reasons. For sure, being your own boss, working from your home, garage, or office, offers total control and satisfaction. You can ….
Top 5 Instagram Businesses to Start
Instagram is an amazing photo and video sharing app that we use to connect to friends and family online. Interestingly, Instagram is as much a great place to start your ….
Top 30 Best Businesses to Start in Eldoret Town
Would you like to start a small business in Eldoret town? Which business do you have in mind? Do you have data to back up its profitability and to maybe ….
Top 20 Small Businesses For University Students In Kenya
Are you a university student in Kenya and looking for small business ideas to start? You are in the right place. In this article, I will show you the #20 ….
Make Money
Works at Home: 30 Ways to Make Money Fast (Online And Offline)
No matter what your situation is, there’s a side gig for you. Whether it’s to make a little extra cash or help solve an emergency issue, having a backup plan ….
Will Shiba Inu Coin Keep Making Investors Rich in 2024?
The Shiba Inu Coin has been one of the most popular crypto success stories since 2018. This meme-based cryptocurrency moved to its highest in just a few years making it ….
Which TikTok Star Will Have the Most Followers in 2024?
TikTok is a social media app that has taken the world by storm. It is a platform where users can share short videos of themselves. The app has been downloaded ….
Which Freelancing Site Should I Visit To Make Money Coding?
Freelancing is the best way to make money because it allows you to work on your own time and set your own schedule. You can take jobs that are local ….
Where to Get FREE NFTs: 11 Easy Ways to Do It
Non-fungible tokens (NFTs) are all the rage right now. These unique digital assets are quickly becoming a staple in the world of blockchain gaming and collectibles. The best part about ….
What’s The Best Business to Start in Kenya in 2024?
There are many businesses that you can start in Kenya in 2024. However, not all of them will be successful. It is important to do your research and find a ….
What No One Says About Olymp Trade! Put Together in a Video.
Could this be you? You opened an Olymp Trade account. Made a deposit. Traded on a live account for the first time. The outcome? You lost your first $10 deposit. ….
What is the Easiest Way to Make Money Online in Kenya in 2024?
There are thousands of ways you can make money in Kenya. Some of them require no skill or experience whatsoever, others? You’d need skill and experience to do with success. ….
What is The Easiest Way to Make $100 Today?
If you’re already making money online, skip this post. If you’re not already making any money online keep reading. Because the methods that I’m about to show you in this ….
What is The Easiest (Non-Scammy) Way to Make Money Online?
Making money online can seem like a daunting task. There are so many scams and get-rich-quick schemes out there that it’s hard to know what is legitimate and what isn’t. ….
Quotex Tutorials
What is Quotex? Quotex Trading Course for Beginners
Quotex is a cutting-edge digital options trading platform known for its user-friendly interface and numerous tradable assets, including OTC pairs, traded 24/7. The Quotex trading platform accommodates traders of all ….
Try This Quotex 1 Minute Strategy for Fixed Time Trades
While binary options trading is easy and only requires traders to choose between two different outcomes, it isn’t always profitable without a strategy. My honest truth, You can lose so ….
Top Traders on Quotex ++ Earnings And Strategies
Quotex, the most popular trading platform in 2024, has seen a surge in popularity in recent years. With more and more people looking to make a quick buck, it’s no ….
Risk Management: Trading Course for Beginning Quotex Traders
Risk management is an important discipline that traders must understand and implement if they want to protect their capital and improve their potential for profits. In other words, without risk ….
Qx Broker: How to Register with Quotex, Quotex.io in 2024
In order to start trading on the Quotex broker platform, either on the demo or live account, you must create an account. If you are doing this for the first ….
Qx Broker : How to Fund Quotex With Instant EFT in SA
Are you a South African trader looking for a reliable and efficient platform to deposit money and start trading with? Look no further than Quotex! With the addition of the ….
Quotex, Qx Broker 80% Weekend Bonus Promo Code
Welcome to the exciting world of trading! If you’re looking for a reliable and user-friendly trading platform, then look no further than Quotex.io. Qx broker is today giving out trading ….
Quotex Withdrawal Problem? Use This Other Method
Are you looking for a reliable and profitable binary options trading platform? Do you want to join thousands of traders who are making money online with Quotex? If yes, then ….
Quotex Weekly Tournament: Up to $10,000 in Prize Money
Every other month, the Quotex trading platform allows its users to participate in trading contests and earn more money. One such contest or tournament is the Quotex weekly tournament with ….
Quotex Trading Course for Beginners: Market analysis
Once you create a demo account in Quotex to start trading, you will notice that the platform has some type of chart. Generally, trading platforms have 4 different chart types ….
XM Tutorials
How XM Trading Works in Kenya
If you went to Google and searched, “how XM trading works” then chances are, you have never traded before, you don’t have a trading account and most importantly, you want ….
How To Trade With XM Forex.
So, you have just created a trading account in XM Forex and completed the account opening process successfully and now you are wondering, what next? How does Xm trading work? ….
How to Trade on XM Even on Weekends
Trading the financial markets via a broker like XM means getting access to real-time pricing of the financial assets when you want to trade. But, as we all know, the ….
How to Open a Trading Account With XM in Kenya.
If you are reading this post then chances are, you are convinced that Xm is the best broker for retail Forex, both locally and globally. And the truth is, XM ….