Harami in Forex

A harami is a two-candle pattern in which a small second real body sits inside the real body of a larger first candle. It represents contraction after a period of stronger directional movement.

How to Recognise It

The first candle has a relatively large body. The second candle opens and closes within the first candle's body, producing a smaller “inside” body. A bullish harami usually follows a decline; a bearish harami usually follows an advance. The exact wick relationship is less important than the body containment.

How to Read It

The smaller second body shows that momentum has slowed and the previous side no longer controls the period as decisively. This can warn of a pause or potential reversal, but it is weaker without trend context and confirmation. If the second candle is a doji, the pattern is called a harami cross.

Context and Confirmation

Read the candle only after its timeframe has closed. A single candlestick records what buyers and sellers did during one period, but it does not guarantee what the next period will do. Its meaning becomes stronger when it appears after a relevant prior move, near a meaningful support or resistance area, and alongside clear market structure. A wick through a level is not automatically the same as a confirmed body-close break.

Key Takeaway

A harami is a small real body contained within the previous large body. It signals contraction, not an automatic reversal.