What is a harami Candlestick?

The Harami candlestick is a Japanese candlestick pattern that comprises of two candles which indicates a potential reversal or continuation in the market. The word ‘Harami’ is derived from the Japanese word for ‘pregnant’ which is representative of the Harami candlestick pattern.

What is a harami candlestick pattern on a NASDAQ 100 E-mini futures contract?

The chart below of the Nasdaq 100 E-mini Futures contract shows an example of both a bullish and bearish Harami candlestick pattern: The first Harami pattern shown on Chart 2 above of the E-mini Nasdaq 100 Future is a bullish reversal Harami. First, there was a long bearish red candle. Second, the market gapped up at the open.

What is a candlestick chart?

Candlestick charts display the high, low, open, and closing prices of a security for a specific period. Candlesticks originated from Japanese rice merchants and traders to track market prices and daily momentum hundreds of years before becoming popularized in the United States. Candlesticks can be used by traders looking for chart patterns.

What does the first candle of the Harami cross mean?

The first candle of the harami cross tells traders that the bears are controlling the market. The Doji opens above the close of the previous day and it has a very narrow range. The appearance of the Doji suggests that some degree of indecisiveness has also entered the market.