Bullish Hamari Candlestick Pattern — How to trade them
The Bullish Harami candlestick pattern is a reversal pattern appearing at the bottom of a downtrend. On the first day of this pattern is a bearish candle with a large body, the next day is a bullish candle with a small body enclosed within the body of the prior candle. As a sign of changing momentum, the small bullish candle ‘gaps’ up to open near the mid-range of the previous candle. Some investors may look at a bullish harami as a good sign that they should enter a long position on a stock.
How to recognize it?
- The first candle of this pattern is a bearish candle showing bearish implications.
- In the second candle of this pattern, the price jumps up from the low of the previous candle for the price to open slightly higher.
- The second candle is not more than 25% the size of the first day's bearish candle.
How to trade them?
To trade the Bullish Harami pattern, you would wait for the second candlestick to form and then enter a long position at the opening of the third candlestick. Your stop loss would be placed below the low of the second candlestick and your target would be the previous high.
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