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Harami pattern: what the small candle inside means

A harami is a big candle followed by a small one whose body fits inside it. The big push suddenly went quiet. That stall can come before a turn, but it doesn't promise one.

Beginner guide · 6-minute read · Updated 2026-10-21

The exact shape

"Harami" is an old Japanese word for pregnant. The big first candle is the mother; the small second candle is tucked inside it.

A harami takes 2 candles:

1. A big candle with a long body.
2. A small candle whose body sits completely inside the first candle's body.

Usually the two are opposite colors:

• Bullish harami: a big red candle, then a small green one inside its body. Forms after a fall.
• Bearish harami: a big green candle, then a small red one inside its body. Forms after a rise.

If the second candle is a doji, it's a harami cross, the stronger form of the stall.

A bullish harami in numbers

An example on a daily chart:

Check it:

• Candle 1's body runs from 62.00 down to 59.00. That's 3.00, a big body.
• Candle 2's body runs from 59.40 up to 60.10. That's 0.70.
• Is 59.40 to 60.10 inside 59.00 to 62.00? Yes. ✓

Candle 2 is less than a quarter of candle 1's body. The smaller it is, the clearer the stall.

What it says about buyers and sellers

1. Candle 1: sellers won a big round and closed near the low.
2. Candle 2: the next round opened higher than that close, at 59.40. Sellers couldn't even push it back to 59.00. Buyers nudged it up a little.

So the selling didn't just slow down. It stopped inside the last candle. The momentum is gone, at least for now.

But notice what didn't happen. Buyers didn't take over. They didn't close above 62.00. A harami is a stall, not a takeover. That's the big difference from an engulfing pattern, which is its opposite.

Harami vs inside bar

These are close cousins, and the difference is one word: body or range.

In our example, candle 2's high (60.50) and low (59.10) are both inside candle 1's range (58.80 to 62.30). So this one is also an inside bar. That's common, but not always true.

Where it matters

A harami in the middle of a quiet chart is two random candles. It earns attention when:

• It forms at a level after a clear move. A bullish harami at a support floor after a fall. A bearish one at a resistance ceiling after a rise. See support and resistance.
• The first candle is big. A big push that suddenly stops says more than a small one.
• It fits the bigger chart. A bullish harami during a pullback in a bigger uptrend lines up with the bigger story.

Confirmation: the next body close

A stall asks: who moves next? We let the next close answer.

For a bullish harami, look for the next candle's body to close:

• Above candle 2's high (60.50). Buyers are following through.
• Even better, above the halfway point of candle 1's body. That's (62.00 + 59.00) ÷ 2 = 60.50. In this example, both lines happen to be at 60.50.

For a bearish harami, flip it: a body close below candle 2's low, and ideally below the middle of candle 1's body.

If the next candle closes below candle 2's body, the stall is over and the old move may be back.

Where the stop goes

You're wrong if price goes back below the lowest low of the pattern. In our bullish example, that's candle 1's low at 58.80.

• Enter on a confirmation close at 60.70.
• Stop at 58.70, just below the pattern.
• Stop distance: 2.00.

The big first candle makes the stop wide. That's normal for a harami. Put the distance into the position size calculator so a loss stays your fixed slice. More: how to set a stop loss.

When it fails

It fails often. That's why the stop comes first.

The most common failure: the stall was just a rest. The next candle closes below candle 2, and the old move carries on, often right through the pattern's low. Strong trends pause like this all the time.

That's why a harami on its own is a weaker hint than an engulfing pattern. One shows a stop. The other shows a takeover.

Common mistakes

• Treating it as a turn. It's a stall. Wait for the next body close.
• Checking tails instead of bodies. The harami rule is about bodies.
• A small first candle. If candle 1 isn't big, there was no push to stall.
• No level. A harami away from any floor or ceiling rarely means much.

Try it today

1. Open a daily chart and use bar replay to go back a few months.
2. Every time a big candle is followed by a small one, check the body rule.
3. If it's a harami, write the halfway point of candle 1's body and your stop before you step forward.
4. Step forward one candle. Did the body close past your line, or back the old way?

Do 10 and log them in your trading journal, split into "at a level" and "not at a level".

Questions