Trading term

What is Harami (candlestick)?

A harami is a two-candle pattern where a large candle is followed by a small one whose body sits entirely inside the first candle's body. It signals that a strong move has abruptly lost momentum.

Harami is Japanese for 'pregnant', which describes the shape: a large body with a small one nestled inside it. A bullish harami has a big down candle followed by a small up candle contained within it; a bearish harami is the mirror. Unlike an engulfing pattern, where the second candle swallows the first, here the second candle is dwarfed by it.

What it communicates is a sudden loss of momentum. One period the market moved hard in one direction; the next it barely moved at all and stayed entirely within the prior range. That contraction after an extended move is the signal — not a reversal in itself, but the trend hesitating.

When the inner candle is a doji, the pattern is called a harami cross and is generally treated as stronger. Note the distinction from an inside bar: a harami compares real bodies, while an inside bar requires the whole range including wicks to be contained.

A small candle nested inside a big one
IN CONTEXTA hard sell-off, then a candle that barely moves at all.ZOOMED INc1 openc1 closecontainedc1c2Bodies only: the small candle sits INSIDE the big one — the opposite of engulfing.

The second body ($34.40–$35.00) sits entirely inside the first ($33.60–$36.80). Momentum stopped dead — the opposite structure to an engulfing pattern.

For example

A stock falls hard from $36.80 to close at $33.60. The next candle opens at $34.40 and closes at $35.00 — a small body sitting entirely inside the previous candle's $33.60–$36.80 body. The selling has abruptly stopped, and price stabilises.

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Why it matters to you

A harami is an early, low-cost warning. It appears before a reversal is obvious, so it works well as a prompt to tighten a stop or take partial profit while the move is still in your favour — rather than as an entry signal, where its modest hit rate would work against you.

⚠ Hesitation is not reversal

A harami says momentum paused, and pauses inside strong trends resolve in the trend's direction more often than against it. Traded as a standalone reversal signal it disappoints. Most traders require confirmation from the following candle, and give it far more weight at a significant level than in open space.

Frequently asked questions

What is a harami candlestick pattern?

It's a two-candle pattern where a large candle is followed by a small one whose body sits entirely within the first candle's body. It signals that a strong move has suddenly lost momentum.

What's the difference between a harami and an engulfing pattern?

They're opposites in structure. In a harami the second candle is small and contained within the first; in an engulfing pattern the second candle is large and swallows the first. Harami signals hesitation, engulfing signals a takeover.

What is a harami cross?

It's a harami whose inner candle is a doji — open and close effectively equal. Because the second period showed total indecision immediately after a strong move, it's generally treated as a stronger version of the pattern.

Is a harami the same as an inside bar?

They're close but not identical. A harami compares real bodies only, so wicks may extend beyond the first candle. An inside bar requires the entire range, wicks included, to sit within the previous candle's range.

Related terms

Anchored VWAPAnchored VWAP is a volume-weighted average price that starts from one candle you choose, rather than resetting at the start of each session. You anchor it to a meaningful event — an earnings gap, a major low, a breakout — and it tracks the average price everyone has paid since.Ascending triangleAn ascending triangle is a bullish continuation pattern: a flat horizontal resistance line on top, with a rising trendline of higher lows beneath it. As the higher lows squeeze price against the ceiling, pressure builds — and it usually resolves with a breakout up through the resistance.ATR (Average True Range)ATR (Average True Range) measures how much a security typically moves in a period — its volatility — as an average of recent trading ranges. It doesn't say which direction price is heading, only how far it tends to travel, which makes it a core tool for stop-losses and position size.Bearish engulfingA bearish engulfing is a two-candle reversal pattern in which an up candle is followed by a down candle whose body completely covers it. The second candle opens above the previous close and closes below the previous open.
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