How to Use Bullish and Bearish Harami Candles to Find Trend Reversals

The Harami candle is a Japanese candlestick formation that can signal trend reversals, offering crypto traders a good risk-to-reward ratio trade setup. The pattern is created with two candles, a very tall candle followed by a substantially shorter candle.

Harami patterns can be found in any time frame. The process of trading them is fairly straightforward once you’re comfortable identifying them.

What Is the Harami Candlestick Pattern?

The Harami candlestick formation is a reversal pattern consisting of two candles. The first is a tall candle continuing a trend, and the second candle is significantly shorter, of an opposite color, signaling a reversal of the trend. The first candle’s body must completely engulf the second candle’s body.