In a bull trend, buy above the bullish Engulfing pattern for bullish continuation.In this case, the second candle body fully engulfs the first and represents a strong reversal signal. The body of the second candle completely engulfs the body of the first.Īgain, the focus on the candle bodies looks for a real reversal. Simply flip a Harami pattern horizontally and you will get an Engulfing pattern.
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Read: How To Trade Trend Reversals With Harami and Trend Channels In a bear trend, use the bearish Harami to pinpoint the end of bullish retracement.In a bull trend, use the bullish Harami to pinpoint the end of bearish retracement.Thus, it is not surprising that many Harami candlestick patterns are also inside bars.Ĭompared with the Engulfing candlestick pattern below, it is a weaker reversal pattern. Hence, it represents the real and conclusive movement of the candlestick. The smaller candle bodies point to decreased volatility. The candle body stands for the real price change of the candle regardless of its intra-candle excursions. It means that the market has come to a muted reversal. Similarly, in a bearish Harami, the first bar closes higher than it opens while the second bar closes lower. Typically, in a bullish Harami, the first bar closes lower than it opens while the second bar closes higher. The body of the baby bar must be entirely within the body of the mother bar. The first candlestick is the mother, and the second candlestick is the baby.įocus on their bodies. Just remember that Harami means pregnant in old Japanese. Part of another candlestick pattern (discussed below).Continuation pattern in a strong break-out aligned with the market bias.If you must trade the Marubozu pattern, consider the following. Together with the Doji candlestick, they highlight the extremes of the candlestick spectrum.īy placing a candlestick on this spectrum, we are able to judge the directional strength of any bar. The Marubozu is more useful as a learning tool than as a pattern for trading. Its opening price and closing price are at the extreme ends of the candlestick.Ī Marubozu that closes higher signifies powerful bullish strength while one that closes lower shows extreme bearishness. Read: Combining a Doji Pattern with Floor Pivots For Intraday ReversalsĪ Marubozu is the polar opposite of a Doji. Treat it as a signal to stand aside (if there is no trend to reverse).Trade it like a reversal signal (if there is a trend to reverse).It’s like an area of congestion compressed into one candlestick. In a Doji candlestick, price is essentially unchanged. It looks like a cross, with the same opening and closing prices. Simply learn these 10 candlestick patterns for an illuminating foundation.ĩ. While the encyclopedia is great for reference, there is no need to memorise the 929-page compendium. Most likely, the answer is yes. In that case, why not make the most out of it by mastering candlestick patterns?Īccording to Thomas Bulkowski’s Encyclopedia of Candlestick Charts, there are 103 candlestick patterns (including both bullish and bearish versions). Are you using candlestick charts as your default chart type for price action analysis?
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