25 Nov
How to analysis and Trade with Bullish Harami Pattern
In this blog, we will see about the Bullish Harami Pattern, which is one of the Japanese candlestick charting techniques. We will deeply describe the Bullish Harami Pattern formation, structure, theory, and techniques to analyze and make profit with this pattern.
You will learn more about the Bullish Harami Pattern in detail, which you could use in your trading technique. So read the full blog to get a better understanding of the pattern and techniques. Let’s dive into the concept.
Table of Contents
The Bullish Harami Pattern is a trend reversal pattern. It is formed on the Low Trend in the chart. So the prior trend should be a downtrend. If this pattern is formed in the low trend, it has the possibility that this pattern will work 80% in the market.
Bullish Harami is a multiple candlestick pattern. It has two candlestick formations. The first candle is a bear candle and second is a bull candle. Now if you see in above image, the first bear candle covers the second candle body fully. So it forms like a harami candle that shows us the market is going to reverse.
If you see in the above image, there is a Hammer Pattern formation at the low trend. So as per the single candlestick pattern theory of hammer formation, the market is going to reverse. Then we also got confirmation that there is also a bull harami pattern is formed. Overall we have strong confirmation that the market will definitely move up.
Theory of Bullish Harami Pattern
Now we will be analyzing how the market will perform in this pattern. And how to analyze and take trade with this pattern.
As you see in the above image the Bullish Harami formed in the low trend. Then you can also see that there is a Spinning Bottom formation. Before these patterns were formed there was a downtrend. You can see that the market has full control over the seller and reached the low price. Then the buyer pushed the market for the reversal at the support level. This pattern should be formed in a higher timeframe. Then we can also analyze this pattern in the inner timeframe to check for structure formation. So we can take a Buy Entry in the next running candle.
Confirmation of Bullish Harami Pattern
If the next candle of the Bullish Harami breaks the previous resistance trend line, we can get confirmation that the market is going to rise. So we can take a buy entry to make a profit.
Entry for Bullish Harami Pattern
The Entry for the Bullish Harami Pattern will be between the running candle open price and the previous candle low price by analyzing in the inner timeframe to take entry in the buy range as shown in 1.
If the pattern is formed as shown in 2, you make an entry by analyzing the inner timeframe and entry at the support level.
Note: For taking entry you should always analyze the 15 min or lesser timeframe. It shows how much cheaper you can buy or sell the script according to your analysis.
Stop Loss for Bullish Harami Pattern
The Stop Loss for Bullish Harami Pattern will be the low price of the anyone of the Bullish Harami as shown above image.
You can also make a Trailing Stop Loss as the market goes above by drawing a support line as shown in the above image.
Steps to check before taking the entry with this pattern.
Step 1: Search for the Bullish Harami pattern in the higher time frame.
Step 2: Check if the pattern is in a low trend and the prior trend should be a downtrend.
Step 3: Check whether the Bull Harami is formed correctly. And you also check the 2nd candle that shows any single candlestick pattern.
Step 4: Check the structure formation if any in the inner timeframe of the pattern. If you get the perfect structure move on to the next step.
Step 5: Set entry and stop loss level as discussed in theory and execute the trade.
Step 6: Check for confirmation that the previous resistance line is broken, we also got confirmation that this pattern is on a low trend, and the second candle also has a reversal pattern, so the market will surely move up and we can make a huge profit.
