The long lower wick reflects strong rejection of bearish pressure. Dragonfly Doji is a candlestick where the open, high, and close all occur near the top of the candle. Dragonfly Doji visually looks like a “T,” with a long lower shadow. Bullish Marubozu is a candlestick with no upper or lower shadows, opening at the low and closing at the high.

What are Single, Double, and Triple Bullish Candlestick Patterns?

The bullish harami performs best when it appears within a third of the yearly low, improving its success rate significantly. However, when it appears randomly throughout a downtrend, its predictive power drops to near-random levels. The only difference between a bullish harami cross and a bullish harami is that the second candle of the harami cross is an engulfed doji candle. In contrast, the bullish harami only requires that the second candle is engulfed by the previous – it doesn’t require it to be a doji.

However, in a strong downtrend, an RSI below 30 and a bullish harami may be overshadowed by intense selling pressure. Some traders also track how RSI reacts after the harami—if it begins to move upwards, that can help support the case for a reversal. The bullish harami candle pattern can indicate a slowdown in selling, but the market’s behaviour around the pattern can be a key clue whether it’s just a pause or a more significant move. Our lessons, designed to help you learn to trade, cover everything from smart buying and selling decisions to the nuances of trends and candlestick patterns.

Our test data show this theory is true; the Bullish Harami is a bullish signal for the following ten trading days. Learn what Bullish Harami patterns are, and how to trade them effectively, based on reliable and time-tested data. Traditional stop-loss placement below the first candle’s low often gets hit by normal market noise, turning winning trades into frustrating losses. The key is finding the sweet spot between protecting capital and giving the trade room to develop. Join 1,400+ traders and investors discovering the secrets of legendary market wizards in a free weekly email.

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The image below depicts a bullish and bearish harami candlestick pattern. The bullish harami pattern signals a shift from bearish trends by showing a smaller, upward-moving candlestick within a larger downward trend on a candlestick chart. This formation suggests a potential market reversal, offering an entry point for traders considering long positions.

A. Conservative Approach: Wait for Confirmation

Yes, our data shows the Bullish Harami and Bullish Harami Cross can be used for buy and sell signals. They average a 55.25% win rate and 3.95% per winning trade across 5,624 trades. The Bullish Harami Cross is the fifth most accurate candle pattern to trade; it results in 55.3% of trades winning, averaging +4.0% per winning trade. Our research confirms that you should trade the Bullish Harami Cross candle, which returns an average of 0.58% per trade, making it the 9th best-performing candle pattern. You can also trade the Bullish Harami, but expect lower results over time.

Common Bullish Harami Pattern Mistakes to Watch out

Sunder Subramaniam combines his extensive experience in fundamental analysis with a passion for financial markets. He possesses a profound understanding of market dynamics & excels in implementing sophisticated trading strategies. Sunder’s unique skill set extends to content editing, where he leverages his insights to develop equity analysis strategies at Strike.money. Intraday stats show Bullish Engulfing patterns achieve 55–65% win rates when volume aligns. Hammers work best in volatile markets but fail in sideways movement. Understanding the distinction helps traders align strategy with market phase.

  • Conversely, short-selling a Bullish Harami Cross, you should expect to lose 0.58% per trade.
  • Enter a Bullish Harami trade cautiously, ideally after the next candlestick closes higher, confirming the reversal.
  • A bullish candlestick signal is confirmed by volume, trend alignment, and a closing price above the pattern.
  • Bullish harami patterns are profitable if they are used with other indicators that confirm the trend reversals.
  • When you’re doing technical analysis for your next trade, it’s incredibly important to confirm the pattern you’re seeing with additional tools.
  • However, after spotting the bullish haram, you must verify the trend.

Arjun is also an certified stock market researcher from Indiacharts, mentored by Rohit Srivastava. The financial products offered by the promoted companies carry a high level of risk and can result in the loss of all your funds. That’s why traders should have a more holistic approach to increase the hit rate (in addition to the pointers previously mentioned). Based on the Encyclopaedia of Candlestick Charts book by Thomas N. Bulkowski, two or three-bar patterns that appear less frequently tend to perform better.

According to a Bulkowski study, common bullish reversal patterns such as the Morning Star show accuracy rates between 60–70% when paired with trend confirmation. Bullish candlestick patterns are moderately reliable, not foolproof. They often highlight a shift in market sentiment, but their success rate depends on context, timeframe, and volume. Bullish Kicker is a dramatic two-candle reversal pattern where a bearish candle is followed by a bullish candle opening with a strong gap up.

Mastering the Long-Legged Doji: A Trader’s Guide

But before we learn the optimal setups, let’s know how most traders unprofitably trade this pattern. From basics of stock market, technical analysis, options trading, Strike covers everything you need as a trader. A big clue of a continuing downtrend was when the next candle gapped down below the low of the first candle of the harami. WR Trading is not a broker, our virtual simulator offers only simulated trading of a demo account. Prices, market execution can be different from real market situations.

Bullish Harami Cross vs. Bullish Harami

  • With TrendSpider, you can effortlessly identify and execute trades, experiencing the swift and precise results you desire.
  • Below, we are going to show you how to confirm the bullish harami pattern and find good entry and exit levels by using the RSI, MACD, and Fibonacci ratios.
  • Other commonly used candlestick patterns include spinning top, shooting star, hammer, hanging man, and evening star.
  • Cited in long-standing Japanese candlestick literature as “matching lows,” Tweezer Bottom has been used for centuries to signal potential bottoms.

The pattern was called bullish harami candle “Mat Hold” in Japanese analysis to symbolize a resting mat before continuation. It remains one of the most respected continuation setups in candlestick theory. It forms when profit-taking or minor selling interrupts an uptrend, but bulls quickly reassert themselves with a decisive rally. The final candle demonstrates that the bullish trend remains intact.

Wait for the Bullish Harami pattern to form after a proper downtrend, not in the middle of chop or sideways noise. Bonus points if the crossover happens below the zero line because it typically signals a stronger reversal potential. The Bullish Harami is a two-candle reversal pattern that shows up at the bottom of a downtrend. The first candle is long and red (bearish), which is an indicator of strong selling pressure.